Act relating to Payment Systems, etc.
Chapter 1 Definitions
§ 1-1 Interbank systems and systems for payment services
Interbank system shall mean a system based on common rules for clearing, settlement or transfer of funds between credit institutions.
Systems for payment services shall mean systems based on standardised arrangements for the transfer of funds from or between customer accounts in banks and financial undertakings when the transfers involve the use of payment cards, numeric codes or any other form of independent user identification issued to an unrestricted range of customers.
§ 1-2 Securities settlement systems
Securities settlement system shall mean a system based on common rules for clearing, settlement or the transfer of financial instruments as referred to in the second paragraph of § 1-2 of the Act relating to Securities Trading.
§ 1-3 Other definitions
Participant shall mean a clearing house, central counterparty, and other institutions or undertakings that participate in an interbank system or a securities settlement system.
Clearing house shall mean an entity that executes clearing.
Settlement bank shall mean a bank with settlement accounts for participants in an interbank system or a securities settlement system.
Central counterparty shall mean an institution that acts as the party or in any other way guarantees that other participants honour their commitments.
Netting shall mean the conversion into one net claim or one net obligation of claims and obligations resulting from transfer orders issued by two or more participants.
Settlement shall mean the final transfer of funds or financial instruments between participants in an interbank system or a securities settlement system.
Transfer order shall mean any instruction by a participant to transfer a payment or a financial instrument to another participant in the system.
The opening of insolvency proceedings shall mean the moment when debt settlement proceedings were opened as defined in the fourth paragraph of § 4 of Act no. 58 of 8 June 1984 relating to Debt Settlement and Insolvency Proceedings (the Insolvency Act), the moment of the opening of bankruptcy proceedings as defined in the first paragraph of §74 of the Insolvency Act, or the moment the decision is handed down to place an entity under public administration as defined in §4-5 of the Act of 6 December 1996 relating to Guarantee Schemes for Banks and Public Administration, etc., of Financial Institutions.
Payment card shall mean a cash, debit or credit card or similar card for the withdrawal or transfer of funds.
The EEA shall mean the European Economic Area.
Chapter 2 Interbank systems
§ 2-1 Purpose
The purpose of the provisions in this chapter is to ensure that interbank systems are organised to ensure financial stability. Particular emphasis is placed on reducing the risks associated with liquidity or solvency difficulties of a participant in such a system.
§ 2-2 Scope
The provisions in this chapter apply to the establishment and operation of interbank systems in Norway. The provisions in this chapter do not apply to Norges Bank.
§ 2-3 Authorisation
An interbank system cannot be established or operated without authorisation from Norges Bank.
Norges Bank may grant exemptions to the authorisation requirement for systems whose operations are limited to the extent that they are assumed to have no significant effect on financial stability.
§ 2-4 Authorisation requirements
An interbank system shall have an operator that is responsible for its establishment and operation. The operator may be a participant bank, another company, non-stock institution or association.
The manager of the operator's activities shall satisfy the necessary requirements for good conduct and experience. This also applies to board members.
The agreement between participants in an interbank system shall stipulate the rights and obligations of participants, and indicate the operator.
Norges Bank may stipulate more detailed requirements regarding activities, including capital and security requirements applicable to the operator, settlement bank or central counterparty.
§ 2-5 Application for authorisation
The application for authorisation shall contain information concerning the following:
a) owners and participants, and a plan for the organisation and operation of the system, including the distribution of responsibilities of tasks between banks and other institutions participating in the system,
b) the criteria established for direct and indirect participation in the system. If participation in the system is conditional on membership or capital contributions, the application should also specify these conditions,
c) measures to safeguard technical operations, including a contingency plan in the event of any operational disruption should the ordinary system fail to function,
d) measures to limit risks in the system arising from illiquidity or insolvency of participants in such systems,
e) principles of linkage to systems for payment services and other funds transfers between customer accounts.
The agreement referred to in the third paragraph of § 2-4 shall be enclosed with the application.
§ 2-6 Changes to agreements and new agreements
The operator shall notify Norges Bank before making significant changes with respect to ownership, organisation, operations, etc. as referred to in § 2-4 to § 2-5.
Changes may be implemented unless otherwise decided by Norges Bank within two months after notification has been received.
Norges Bank may issue further specified rules governing the changes referred to in this section, including rules governing exemption to the notification requirement.
§ 2-7 Access to participate in an interbank system
Credit institutions that are authorised to engage in business in Norway have the right to participate in interbank systems and to use such systems in accordance with established charges and ordinary commercial conditions. This does not apply if authorisation has been granted and the agreement for the interbank system stipulates special conditions for direct or indirect participation in the system.
§ 2-8 Suspension of a participant
The operator shall suspend a participant in the system if continued participation is in contravention of § 2-1. Before the decision to suspend a participant is taken, the case shall be submitted, to the extent possible, to Norges Bank.
§ 2-9 Supervision, etc.
Norges Bank may require the operator to provide information that Norges Bank deems necessary to ensure that the system is organised and operated in accordance with the provisions set out in or pursuant to this Act.
If Norges Bank finds that the system is not organised or operated in accordance with the provisions set out in or pursuant to legislation, Norges Bank may instruct the operator to implement measures to remedy the situation.
Norges Bank may require the designation of a new operator if the operator is no longer deemed capable of conducting such business.
§ 2-10 Revocation of authorisation
Norges Bank may revoke the authorisation pursuant to § 2-3 in full or in part if:
a) the operator commits gross or repeated violations of its duties as set out in or pursuant to legislation,
b) there are other irregularities on the part of the operator or other circumstances providing cause for concern that the system is not functioning as indicated in § 2-1,
c) the operator is no longer engaged in active operations connected to the activities requiring authorisation.
Chapter 3. Systems for payment services
§ 3-1 Purpose
The purpose of the provisions in this Chapter is to ensure that systems for payment services are organised and operated in a way that promotes secure and efficient payment and effective and co-ordinated execution of payment services.
§ 3-2 Notification requirement
The Banking, Insurance and Securities Commission shall, without undue delay, be notified of the establishment and operation of a system for payment services.
The notification shall contain information concerning the following:
a) agreements between participant institutions with respect to the transfer or withdrawal of funds,
b) agreements regarding the linkage of user sites
c) agreements between systems for payment services
d) use of payment cards, numeric codes or other forms of independent user identification that are to be used for the transfer of funds.
§ 3-3 General system requirements
Systems for payment services shall be organised and operated in accordance with the purpose as defined in § 3-1. The Banking, Insurance and Securities Commission may issue further specified rules on the standardisation of agreements, conditions, technical aspects, etc., for systems for payment services.
If the Banking, Insurance and Securities Commission finds that the system is not organised or operated in accordance with the provisions set out in or pursuant to legislation, the Banking, Insurance and Securities Commission may instruct the operator to implement measures to remedy the situation.
Chapter 4. Legal protection and security for clearing and settlement agreements
§ 4-1 Scope
The provisions in this Chapter apply to interbank systems with authorisation as referred to in § 2-3, Norges Bank and securities settlement systems subject to separate approval of the Banking, Insurance and Securities Commission.
The provisions in this Chapter may, subject to separate approval, be applied to interbank systems and securities settlement systems established in other EEA States. Approval shall only be granted if the system's rules are deemed to be appropriate. Approval of interbank systems is granted by Norges Bank. Approval of securities settlement systems is granted by the Banking, Insurance and Securities Commission.
The provisions in this Chapter shall only apply to systems with at least three participants that have agreed that Norwegian legislation shall apply to the system in accordance with § 4-3, and that has been notified to the EFTA Surveillance Authority in accordance with § 4-5.
The provisions in the first and third paragraph of § 4-2 and § 4-4 also apply to Norwegian participants in an interbank system or securities settlement system that have chosen to operate pursuant to legislation in other EEA States for that system and that has been notified to the EFTA Surveillance Authority or the EU Commission in accordance with Council Directive 98/26/EC on settlement finality in payment and securities settlement systems.
§ 4-2 Legal protection for clearing and settlement agreements
Agreements on clearing and settlement may be applicable subject to their content even if the insolvency proceedings against a participant in the system are opened when the transfer order is entered into the system before the opening of insolvency proceedings.
The moment when the order shall be considered received in the system shall be agreed between the participants in the system. The same applies to the moment when the right to revoke the order no longer applies. Norges Bank may issue further rules for interbank systems with respect to the moment when the ordered is considered received in the first paragraph. The Banking, Insurance and Securities Commission may lay down such rules for securities settlement systems.
If the order is entered into the system after the opening of insolvency proceedings in the first paragraph, and the order is executed the same day as the insolvency proceedings commence, the first paragraph also applies if the clearing house, central counterparty or settlement bank can prove that they were not aware, nor should have been aware, of the opening of solvency proceedings after the moment of settlement.
§ 4-3 Choice of legislation
Participants may only choose legislation in an EEA State where at least one of the participants has its head office.
The legislation in the State that the participants have chosen for the system pursuant to the first paragraph determines the rights and obligations of an insolvent participant in the system.
§ 4-4Collateral security
Collateral security provided to a participant in an interbank system or securities settlement system may not be invalidated according to § 5-7 of the Creditors Security Act.
If financial instruments as referred to in the second paragraph of § 1-2 of the Securities Trading Act are provided as collateral security pursuant to the first paragraph, and the right to the financial instruments are recorded on a register, an account or a securities depository in an EEA State, the legislation in that country shall determine the rights of the holder of the collateral security provided.
§ 4-5Notification requirement
Interbank systems as referred to in § 4-1 shall notify Norges Bank of the participants in the system, and changes in participants. Securities settlement systems as referred to in § 4-1 shall communicate the same information to the Banking, Insurance and Securities Commission.
Norges Bank shall notify the EFTA Surveillance Authority of the systems that fall within the scope of this Chapter, and notify the Authority of the opening of insolvency proceedings against a participant in such a system.
A participant in the system shall inform any third party that has a justified interest in such information of the systems in which participants are members and the main rules for the operation of such systems.
Chapter 5 Other provisions
§ 5-1 Regulations
The Ministry may issue further specified rules on:
a) Norwegian financial institutions' participation in foreign payment systems,
b) clearing, settlement and transfers of means of payment to and from foreign sectors,
c) payment systems that are not linked to a customer account in a bank or financial undertaking,
d) supplementing and delimiting of the provisions set out in this Act.
§ 5-2 Duty of confidentiality
Employees and employee representatives in institutions governed by this Act are subject to a duty of confidentiality with regard to any information they may receive concerning the business and private affairs of others, unless otherwise laid down in legislation. This also applies to other persons who perform services for the institution.
Duty of confidentiality does not prevent board members or other persons authorised by the board to provide other financial institutions with information received in their capacity as operator.
§ 5-3 Penalties and coercive fines
Any employee or employee representative in institutions governed by this Act who with intent or negligence contravenes the Act or provision or decisions issued thereto is punishable by fine, or in particularly aggravating circumstances by imprisonment up to one year, unless the offence is subject to more severe penalty provisions. Penal provisions also apply to accomplices.
Contravention of the provisions laid down in or issued pursuant to this Act is an offence. The statutory limitation for instituting criminal proceedings is five years.
If injunctions pursuant to legislation are not complied with, the Ministry may decide that those persons or institutions that shall comply with the injunctions shall pay a daily fine until the situation is rectified. The imposition of a fine is a basis for enforcement by distraint.
§ 5-4 Application of the Act to Svalbard
The King issues regulations with respect to the application of the Act to Norway's economic zone and Svalbard, Jan Mayen and dependencies, and may lay down separate rules with regard to the conditions in these areas.
Chapter 6 Entry into force. Transitional provisions. Amendments to other acts
§ 6-1Entry into force and transitional provisions
This Act comes into force on the date decided by the King. The different provisions may enter into force at different times.
The Ministry may lay down further specified transitional rules.
§ 6-2 Amendments to other acts
From the time the Act enters into force the following amendments to other acts take effect:
1. Second paragraph of § 23 of Act no. 1 of 24 May 1961 relating to Savings Banks shall read:
The provision in the first paragraph shall not apply to loans in Norges Bank and the Savings Banks Guarantee Fund. The provision in the first paragraph is not applicable to savings banks, which may provide fixed property as collateral security for loans to finance own bank buildings. A savings bank may also provide its assets as collateral security for contracts with a clearing house, central counterparty or settlement bank. The Banking, Insurance and Securities Commission may grant exemptions to the provision in the first paragraph.
2. The following amendments apply to Act no. 2 of 24 May 1961 relating to Commercial Banks:
Second sentence, third paragraph of § 5 is repealed.
3. The following amendments apply to Act no. 58 of 8 June 1984 relating to Debt Settlement and Insolvency Proceedings (the Insolvency Act):
New second paragraph of § 5 shall read:
The Bankruptcy Court shall immediately notify Norges Bank of any decision to open debt settlement proceedings in an institution that participates in a system as defined in the first paragraph of § 1-1 or § 1-2 of the Act relating to Payment Systems.
New fifth paragraph of § 78 shall read:
The Bankruptcy Court shall immediately notify Norges Bank of any decision to open insolvency proceedings in an institution that participates in a system as defined in the first paragraph of § 1-1 or § 1-2 of the Act relating to Payment Systems.
4. Act no. 8 of 8 March 1985 relating to temporary supplement to Act no. 40 of 10 June 1988 relating to Financing Activity and Financial Institutions is repealed.
5. The following amendment applies to Act no. 28 of 24 May 1985 relating to Norges Bank and the Monetary System (Norges Bank Act):
New fourth and fifth sentence, third paragraph of § 5 shall read:
The Supervisory Council may, on the proposal of the Executive Board, decide that the production of banknotes and coins, or other commercial activity that falls within the scope of this Act, shall be performed by companies that are either partly or wholly owned by the Bank. The Supervisory Council is responsible for the supervision of such companies.
Existing fourth to seventh sentence, third paragraph of § 5 shall be the sixth to the ninth sentence.
New § 8 shall read:
§ 8a.
Enterprises owned by Norges Bank
The Supervisory Council may, on the proposal of the Executive Board, decide that the production of banknotes and coins, or any other commercial activity that falls within the scope of this Act, shall be conducted by companies that are either partly or wholly owned by the Bank. The Executive Board represents the Bank as owner on the bodies of such companies.
The Supervisory Council is responsible for supervising the companies referred to in the first paragraph, and has the right to request the information necessary to perform its supervisory tasks from the company's manager, board of directors and the elected auditor. The Supervisory Council shall be notified in advance of the date of the general meeting of the companies and has the right to be present at the general meeting.
New second sentence, first paragraph of § 11 shall read:
The Executive Board may decide that the Bank shall participate in an employers' association that may, in its field, make decisions that are binding on the Bank.
Existing second and third sentence, first paragraph of § 11 shall be the new third and fourth sentence
.
New third paragraph of § 13 shall read:
The Bank may decide that other operators may produce banknotes and coins pursuant to an agreement with the Bank.
New first paragraph of § 21 shall read:
The Bank may buy and sell debt instruments that are issued or guaranteed by the government and other easily negotiable debt instruments. Notwithstanding the rules in § 22, the Bank may enter into repurchase agreements and engage in other market operations using such instruments.
6. Second paragraph no. 2, § 7-9 of Act no. 79 of 19 June 1997 relating to Securities Trading shall read:
2. Second and third paragraph of § 7-5, §§ 7-6 and 7-7, and Chapter 13.
7. The following amendments apply to Act no. 39 of 10 June 1988 relating to Insurance Activity:
Second paragraph of § 6-1 shall read:
The Banking, Insurance and Securities Commission shall act in lieu of the Bankruptcy Court in the exercise of its authority pursuant to §§ 5-25 to 5-27 of the Act relating to Private Limited Companies and the Act relating to Public Limited Companies. The rules in Chapter 7 and §§ 5-25 to 5-27 of the Act relating to Private Limited Companies and the Act relating to Auditors also apply to mutual insurance companies.
Second paragraph of § 6-2 is repealed.