Act relating to Payment Systems, etc.

Cf. Annex IX point 16 b of the EEA Agreement (Council Directive 98/26/EC).

Chapter 1. Definitions

Section 1-1. Payment systems

Payment system shall mean a funds transfer system with formal and standardised arrangements and common rules for the processing, clearing and settlement of payment transactions. A payment system includes interbank systems or systems for payment services.

Interbank systems shall mean systems with common rules for clearing, settlement and transfer of funds between credit institutions.

Systems for payment services shall mean systems with standard terms and conditions for the transfer of funds from or between customer accounts in banks or other undertakings that are authorised to provide payment services pursuant to Section 4b-1 first paragraph of the Financial Institutions Act when the transfer involves the use of payment cards, numeric codes or any form of independent user identification issued to an unrestricted range of customers.

Amended by Act No. 20 of 4 June 2010 (in force 1 July 2010 pursuant to Decree No. 771 of 4 June 2010).

Section 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 Section 2-2 second paragraph of the Securities Trading Act.

A securities settlement system shall have an operator which is responsible for its establishment and operation and which is organised as referred to in Section 2-4 first paragraph of that Act.

Amended by Acts No. 75 of 29 June 2007 75 (in force 1 Nov. 2007 pursuant to Decree No. 752 of 29 June 2007) and No. 42 of 18 Nov. 2011 (in force 1 Jan. 2012 pursuant to Decree No. 1107 of 18 Nov. 2011).

Section 1-3. Other definitions

Participant shall mean a clearing house, settlement bank, central counterparty, operator of another system and other institutions or undertakings that participate in an interbank system or a securities settlement system.

Clearing house shall mean an entity that performs 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 becomes a party to a transaction or in another manner guarantees that other participants meet their obligations.

Clearing shall mean the conversion of claims and obligations resulting from transfer orders issued by two or more participants into a single net obligation or net claim.

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 date on which debt settlement proceedings are initiated pursuant to Section 4 fourth paragraph of Act No. 58 of 8 June 1984 relating to Debt Settlement and Bankruptcy Proceedings (Bankruptcy Act), the date of the initiation of bankruptcy proceedings pursuant to Section 74 first paragraph of the Bankruptcy Act, or the date on which a decision is made to place an entity under public administration pursuant to Section 4-5 of Act No. 75 of 6 December 1996 relating to Guarantee Schemes for Banks and Public Administration, etc., of Financial Institutions (Guarantee Schemes Act).

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.

Interoperating system shall mean two or more systems the operators of which have agreements with one another for the cross-system execution of transfer orders. An arrangement established between interoperating systems does not constitute a system.

Amended by Act No. 42 of 18 Nov. 2011 (in force 1 Jan. 2012 pursuant to Decree No. 1107 of 18 Nov. 2011).

Chapter 2. Interbank systems

Section 2-1. Purpose

The purpose of the provisions of this chapter is to ensure that interbank systems are organised to ensure financial stability. Particular weight shall be placed on mitigating the risks associated with liquidity or solvency problems of participants in such systems.

Section 2-2. Scope

The provisions of this chapter apply to the establishment and operation of interbank systems in Norway.

The provisions of this chapter do not apply to Norges Bank.

Section 2-3. Licence

An interbank system may not be established or operated without a licence from Norges Bank.

Norges Bank may grant exemptions from the licensing requirement for systems whose operations are limited to the extent that they are assumed to have no significant effect on financial stability.

Section 2-4. Licensing 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, self-owning institution or association.

The general manager of the operator's activities shall satisfy the necessary requirements for good conduct and experience. The same applies to the members of its board of directors.

The agreement between participants in an interbank system shall stipulate the rights and obligations of participants and state the identity of the operator.

Norges Bank may lay down more detailed requirements regarding activities, including capital requirements applicable to and collateral requirements vis-à-vis the operator, settlement bank or central counterparty.

Section 2-5. Licence application

The licence application shall include the following information:

a) owners and participants, and a plan for the organisation and operation of the system, including the division of tasks and responsibilities 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, this shall bespecified,

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 transfer between customer accounts.

The agreement referred to in Section 2-4 third paragraph shall be enclosed with the application.

Section 2-6. Amendment 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 Section 2-4 to Section 2-5.

Changes may be implemented unless otherwise decided by Norges Bank within two months after notification has been received.

Norges Bank may issue more detailed rules concerning the changes referred to in this section, including rules concerning exemption from the notification requirement.

Section 2-7. Right to participate in an interbank system

Credit institutions that are authorised to operate in Norway are entitled to participate in interbank systems and to use such systems in accordance with established charges and on ordinary commercial terms. This provision does not apply if a licence has been granted and the agreement for the interbank system stipulates that special terms and conditions shall apply for direct or indirect participation in the system.

Section 2-8. Suspension of a participant

The operator shall suspend a participant in the system if continued participation would be in contravention of Section 2-1. Before the decision to suspend a participant is taken, the matter shall be submitted, if possible, to Norges Bank.

Section 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 the measures necessary to rectify the matter.

Norges Bank may require that a new operator be designated if the operator is no longer regarded as fit to manage the business.

Section 2-10 Revocation of licence

Norges Bank may revoke the licence under Section 2-3 in full or in part if:

a) the operator has shown a gross or sustained failure to perform duties set out in or pursuant to legislation,

b) misconduct on the part of the operator in other respects or other circumstances provide grounds for concern that the system is not functioning as stated in Section 2-1,

c) the operator is no longer actively engaged in the licensed business activity.

Chapter 3. Systems for payment services

Section 3-1. Purpose

The purpose of the provisions of 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 provision of payment services.

Section 3-2. Notification requirement

Notification of the establishment and operation of a system for payment services shall be submitted to Finanstilsynet (Financial Supervisory Authority of Norway) without undue delay.

The notification shall contain information on the following:

a) agreements between participant institutions with respect to the transfer or withdrawal of funds,

b) agreements regarding linking of user sites

c) agreements between payment service systems

d) use of payment cards, numeric codes or other forms of independent user identification that are to be used in connection with payment.

Amended by Act No. 48 of 19 June 2009 (in force. 21 Dec. 2009 pursuant to Decree No. 1603 of 18 Dec. 2009).

Section 3-3. General system requirements

Payment service systems shall be organised and operated in accordance with the purpose stated in Section 3-1. Finanstilsynet may issue more detailed rules on the standardisation of agreements, contractual terms, technical aspects, etc. pertaining to payment service systems .

If Finanstilsynet finds that a system is not organised or operated in accordance with the provisions set out in or pursuant to legislation, Finanstilsynet may instruct the operator to implement the measures necessary to rectify the matter.

Amended by Act No. 48 of 19 June 2009 (in force 21 Dec. 2009 pursuant to Decree No. 1603 of 18 Dec. 2009).

Chapter 4. Legal protection and collateral for clearing and settlement agreements

Section 4-1. Scope

The provisions of this Chapter apply to interbank systems licensed according to Section 2-3, Norges Bank and securities settlement systems subject to the approval of Finanstilsynet.

The provisions of this Chapter may, subject to approval, be applied to interbank systems and securities settlement systems established in another EEA Member State. Approval shall be granted only 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 Finanstilsynet.

The provisions of this Chapter shall apply only to systems with at least three participants, in addition to the operator and any settlement bank, central counterparty or clearing house, that have agreed that the system shall be subject to Norwegian law in accordance with Section 4-3, and that have been notified to the EFTA Surveillance Authority in accordance with Section 4-5.

The provisions of Section 4-2 first and third paragraph and Section 4-4 also apply to Norwegian participants in interbank systems or securities settlement systems that have decided that the system shall be subject to the law of another EEA Member State and that have been notified to the EFTA Surveillance Authority or the European Commission pursuant to Council Directive 98/26/EC on settlement finality in payment and securities settlement systems.

Amended by Acts No. 48 of 19 June 2009 (in force 21 Dec. 2009 pursuant to Decree No. 1603 of 18 Dec. 2009) and No. 42 of 18 Nov. 2011 (in force 1 Jan. 2012 pursuant to Decree No. 1107 of 18 Nov. 2011).

Section 4-2. Legal protection for clearing and settlement agreements

Agreements on clearing and settlement may be enforced as to their content even if insolvency proceedings are opened against a participant in the system concerned or in an interoperating system, or against the system operator of an interoperating system, if the transfer order has been entered into the system prior to the initiation of insolvency proceedings.

The date on which transfer orders shall be considered entered into the system shall be agreed between the participants in the system. The same applies to the date on which the right to cancel transfer orders expires. Norges Bank may issue further rules for interbank systems with respect to the date on which transfer orders shall be considered entered into the system pursuant to the first paragraph. Finanstilsynet may lay down corresponding rules for securities settlement systems.

If a transfer order is entered into the system after the opening of insolvency proceedings pursuant to the first paragraph, and the transfer order is executed over the course of the same business day as the opening of the insolvency proceedings, the first paragraph applies correspondingly if the operator is able to substantiate that the operator did not have, or could have been expected to have, knowledge that insolvency proceedings had been opened after the date on which the right to cancel the transfer order expired. In its rules, the system shall stipulate the definition of a business day , covering both daytime and nighttime settlement and include all events in the course of the system’s cycle.

The Ministry may issue further provisions in regulations, including exemptions from the Satisfaction of Claims Act, concerning the use of the available funds of participants to settle transactions on the settlement date, in the event of the opening of insolvency proceedings against the participant.

Amended by Acts No. 64 of 5 July 2002 (in force 5 July 2002 pursuant to Decree No. 719 of 5 July 2002), No. 48 of 19 June 2009 (in force 21 Dec. 2009 pursuant to Decree No. 1603 of 18 Dec. 2009) and No. 42 of 18 Nov. 2011 (in force 1 Jan. 2012 pursuant to Decree No. 1107 of 18 Nov. 2011).

Section 4-3. Choice of law

Participants may choose only the law of an EEA Member State where at least one of the participants has its head office.

The law of the Member State that the participants have chosen for the system pursuant to the first paragraph determines the rights and obligations an insolvent participant has as a participant in the system.

Section 4-4. Collateral

A pledge of collateral to a central bank in the EEA Area, an operator or a participant in an interbank system or securities settlement system may not be annulled under Section 5-7 of the Satisfaction of Claims Act.

If financial instruments as referred to in Section 1-2 second paragraph of the Securities Trading Act are pledged as collateral pursuant to the first paragraph, and the right to the financial instruments has been recorded in a register, an account or a securities depository in an EEA Member State, the law in that country shall be determinative for the rights of the holder of the security interest.

Amended by Acts No. 64 of 5 July 2002 (in force 1 Jan. 2003 pursuant to Regulation No 1627 of 20 Dec. 2002), No. 75 of 29 June 2007 (in force 1 Nov 2007 pursuant to Decree of 29 June 2007) and No. 42 of 18 Nov. 2011 (in force 1 Jan. 2012 pursuant to Decree No. 1107 of 18 Nov. 2011).

Section 4-5. Notification requirement

The operator of interbank systems as referred to in Section 4-1 shall notify Norges Bank of the participants in the system, and of changes with regard to participants. The operator of a securities settlement system as referred to in Section 4-1 shall provide corresponding information to Finanstilsynet.

Norges Bank shall notify the EFTA Surveillance Authority of the systems and system operators 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 disclose to each and every third party with a substantiated interest in the information which systems that participant is a member of and the main rules for that system’s operation.

Amended by Acts No. 48 of 19 June 2009 (in force. 21 Dec. 2009 pursuant to Decree No. 1603 of 18 Dec. 2009) and No. 42 of 18 Nov. 2011 (in force 1 Jan. 2012 pursuant to Decree No. 1107 of 18 Nov. 2011).

Chapter 5. Right to participate in payment systems

Chapter added by Act No. 20 of 4 June 2010 (in force 1 July 2010 pursuant to Decree No. 771 of 4 June 2010), number of earlier Chapter 5 changed to 6.

Section 5-1. Scope

The provisions of this chapter apply to payment institutions’ right to participate in payment systems in Norway. These provisions apply correspondingly to other payment service providers as defined in Section 4b-1 of the Financial Institutions Act.

Payment institution shall mean an undertaking authorised to engage in payment services activities under the rules in or pursuant to Section 4b-2 of the Financial Institutions Act.

Payment services shall mean activities as defined in Section 11 of the Financial Contracts Act.

Added by Act No. 20 of 4 June 2010 (in force 1 July 2010 pursuant to Decree No. 771 of 4 June 2010).

Section 5-2. Terms and conditions for participation in payment systems, etc.

Terms and conditions for participation in payment systems shall be objective, non-discriminatory and proportionate such that they do not hinder access and participation to a greater degree than is necessary to safeguard against specific types of risk such as settlement risk, operational risk and commercial risk and to protect the financial and operational stability of the payment system.

Payment systems shall not impose on payment service providers , payment service users or other payment systems:

a) any restrictive rules concerning effective participation in other payment systems,

b) any rules which discriminate between payment institutions and other payment service providers in relation to the rights, obligations and preferred claims of participants, or

c) any restriction on the basis of institutional status.

Added by Act No. 20 of 4 June 2010 (in force 1 July 2010 pursuant to Decree No. 771 of 4 June 2010).

Section 5-3. Exemptions

The rules in Section 5-2 shall not apply to:

a) payment systems within the scope of Council Directive 98/26/EC on settlement finality in payment and securities settlement systems,

b) payment systems composed exclusively of payment service providers belonging to a financial group composed of entities affiliated by capital ties where one of the affiliated entities enjoys effective control over the other affiliated entities, or

c) payment systems where a sole payment service provider, whether as a single entity or as a corporate group:

  1. acts or is able to act as the payment service provider for both the payer and the payee and is exclusively responsible for the management of the system, and
  2. permits other payment service providers to participate in the system and the latter have no right to negotiate payment service fees between or amongst themselves vis-à-vis the payment system, although they may establish their own pricing vis-à-vis payers and payees.

Added by Act No. 20 of 4 June 2010 (in force 1 July 2010 pursuant to Decree No. 771 of 4 June 2010).

Chapter 6. Other provisions

Amended by Act No. 20 of 4 June 2010 (in force 1 July 2010 pursuant to Decree No. 771 of 4 June 2010), chapter number changed from 5.

Section 6-1. Regulations

The Ministry may issue more detailed rules on:

a) Norwegian financial institutions' participation in foreign payment systems,

b) clearing, settlement and transfers of means of payment to and from foreign countries,

c) payment systems that are not linked to customer accounts in banks or financial undertakings,

d) supplementing and delimiting the provisions of this Act.

Amended by Act No. 20 of 4 June 2010 (in force 1 July 2010 pursuant to Decree No. 771 of 4 June 2010), section number changed from 5-1.

Section 6-2. Duty of confidentiality

Employees and employee representatives in institutions within the scope of this Act have a duty of confidentiality with regard to any information they may receive concerning other parties’ business and private affairs, unless divulging such information is required by law. The same applies to other parties who perform tasks for the institution.

The 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.

Amended by Act No. 20 of 4 June 2010 (in force 1 July 2010 pursuant to Decree No. 771 of 4 June 2010), section number changed from 5-2.

Section 6-3. Penalties and coercive fines

Any employee or employee representative in institutions within the scope of this Act who wilfully or negligently contravenes the Act or provision or administrative orders issued pursuant to the Act is liable to afine, or in particularly aggravating circumstances, to imprisonment for up to one year, unless the offence is subject to more severe penalty provisions. Complicity is subject to the same penalties.

Contravention of the provisions laid down in or issued pursuant to this Act is a minor offence. The statutory limitation period for instituting criminal proceedings is five years.

1. If an administrative order in pursuance of the Act is not complied with, the Ministry may decide that those persons or institutions that must comply with the order shall pay a daily fine until the matter is rectified. Coercive fines are enforceable by attachment.

Amended by Act No. 20 of 4 June 2010 (in force 1 July 2010 pursuant to Decree No. 771 of 4 June 2010), section number changed from 5-3. To be amended by Act No. 28 of 20 May 2005 (in force from the date established by law) as amended by Act No. 74 of 19 June 2009.

Section 6-4. Application of the Act to Svalbard

The King shall issue a regulation relating to the application of this Act to Norway's economic zone and to Svalbard, Jan Mayen and the dependencies, and may lay down separate rules with regard to conditions in these areas.

Amended by Act No. 20 of 4 June 2010 (in force 1 July 2010 pursuant to Decree No. 771 of 4 June 2010), section number changed from 5-4.

Chapter 7. Entry into force. Transitional provisions. Amendments to other acts

Amended by Act No. 20 of 4 June 2010 (in force 1 July 2010 pursuant to Decree No. 771 of 4 June 2010), chapter number changed from 6.

Section 7-1. Entry into force and transitional provisions

This Act comes into force on the date decided by the King. The individual provisions may come into force at different times.

The Ministry1 may lay down further transitional rules.

Amended by Act No. 20 of 4 June 2010 (in force 1 July 2010 pursuant to Decree No. 771 of 4 June 2010), section number changed from 6-1.

1 The Ministry of Finance, pursuant to Decree No. 1344 of 17 Dec. 1999, which by Regulation No. 324 of 13 Apr. 2000 implemented the Act from14 Apr. 2000

Section 6-2.1 Amendments to other acts

From the time the Act enters into force the following amendments to other acts take effect:-- -- --

1 The amending Act No. 20 of 4 June 2010 (in force 1 July 2010 pursuant to Decree No. 771 of 4 June 2010) changed Chapter 6 to Chapter 7 and Section 6-1 to Section 7-1. Section 6-2 was not mentioned.

Published 3 May 2003 15:44
Edited 8 February 2012 12:54