BSP tightens reportorial standards for operators of payment systems

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) has imposed strict reporting standards for operators of payment systems as part of initiatives to establish a safe and efficient payment system in the country.

BSP Governor Benjamin Diokno said the Monetary Board has issued Resolution 196 approving the regulatory reporting standards for operators of payment systems.

“This recent policy issuance is critical in the BSP’s determination of appropriate oversight interventions, formulation of responsive policies and regulations, as well as continuous development of the national payment system,” Diokno said.

The new regulation under Circular 1138 is in accordance with Republic Act 11127 or the National Payment Systems Act (NPSA).

Under the guidelines, reports submitted to the regulator must be accurate, complete and timely to be considered compliant with the BSP reporting standards.

“Inputs to the reports shall be validated by the operators of payment systems prior to submission to the BSP to ensure accuracy, completeness and integrity of information submitted therein. The reports shall reflect all the information required by the BSP,” it said.

The circular requires an operator of payment systems to establish a reporting system that will aggregate all pertinent data and produce the reports required by the BSP under both business-as-usual and stressed conditions in a timely manner.

Stressed conditions refer to emergency conditions for operators of payment systems such as a crisis, national or public health emergencies, weather-related events, or sudden closures of markets and clearing agencies.

To facilitate generation of such information, the board of directors and senior management are directed to implement an effective management information system that enables independent validation and periodic independent review of reports.

“Regulatory reports submitted by the OPS provide valuable information that will aid the BSP in promoting the safe and efficient operation of the national payment system, pursuant to its mandate under the NPSA,” Diokno said.

The policy issuance is part of the phased implementation of the NPSA, which grants the BSP with the authority to require payment system participants, including operators of payment systems, to submit reports on their operations, including relevant information for statistical, policy development, supervisory and regulatory purposes.

The circular also specifies sanctions that may be imposed on an operator of payment systems for non-compliance with reporting requirements.

“Reports with incomplete schedules or attachments shall be considered noncompliant with the reporting standards prescribed in this section. Moreover, submission of reports shall be made within the timeline and in accordance with reporting templates prescribed by the BSP,” Diokno stated in the circular.

The applicable monetary penalty for each violation is P3,000 for primary reports and P600 for secondary reports for operators of payment systems owned by big banks, P1,500 for primary reports and P300 for secondary reports for thrift banks as well as P450 for primary reports and P150 for secondary reports for rural and cooperative banks.

On the other hand, non-bank operators of payment systems would be charged P300 for primary reports and P60 for secondary reports per violation.

Primary reports refer to periodic surveillance reports due for daily, monthly or quarterly submission, while secondary reports are those that shall be required of non-designated operators of payment systems such as semi-annual payment services report and annual reports.

Diokno warned the regulator would also impose non-monetary sanctions such as warning, reprimand, suspension and possible disqualification of the CEO and Board of Directors.

As of February, there are close to 200 operators of payment systems registered with the BSP.