Manager for problematic payment systems eyed

THE BANGKO SENTRAL ng Pilipinas (BSP) is proposing a framework that will let it appoint a manager in cases when a payment system’s security is under threat.

The appointment does not need Monetary Board approval or a court hearing, according to a copy of a draft circular posted on its website.

“This framework seeks to safeguard the continuity of critical payment system functions while minimizing disruption to financial markets and protecting the interests of participants, end-users and the public,” the BSP said.

The BSP will designate the manager of an operator of a designated payment system through an assessment that may include information gathered from offsite surveillance, onsite examination, or when there are potential risks or issues with the payment system’s operations.

Under the draft rules, a manager must have at least 10 years of experience in operating, managing or supervising payment systems and financial operations. He must also have a proven track record in financial, technical and operational management in related, regulated industries.

Under the proposal, the manager will have full control of the payment system’s operations if it is unable to comply with regulatory requirements. The manager may form a specialized group of personnel to help manage the payment system.

They may also suspend the directors and officers, including their pay.

The manager can access and use the payment system’s records, assets and resources, as well as enforce measures to stabilize its operations and mitigate risks. He can also sell or dispose of its assets if needed.

The manager has a year to determine whether the payment system can resume management or if its certificate of authority should be revoked.

If issues persist, the manager can either continue to manage the operations of the payment system or assign his replacement. — Aaron Michael C. Sy