National Payment System Amendment Act

3 Words in bold type in square brackets indicate omissions from existing enactments. Words underlined with a solid line indicate insertions in existing enactments. ~ _.,_ *-...- ... . ’ ..- (English text signed by the President.) (Assented to 28 October 2004.) ACT To amend the National Payment System withdrawal of recognition of a payment system management body by the South African Reserve Bank; to provide for designated settlement systems; to enable payments to third persons; and to provide for the issuance of directives by the South African Reserve Bank; and to provide for matters connected therewith. Act, 1998, so as to provide for the E IT ENACTED by the Parliament of the B fol1ows:- Amendment of section 1 of Act 78 of 1998 Republic of South Africa, as

1. Section 1 of the National Payment System Act, 1998 (hereinafter referred to as the principal Act), is hereby amended- (a) by the insertion after the definition of “clear” or “clearing” of the following 5 definitions: “ ‘clearing, netting and settlement agreements’ means written agree- - ments with regard to clearing, netting or settlement, concluded between Reserve Bank settlement system participants or designated settlement system participants; ‘Companies Act’ means the Companies Act, 1973 (Act No. 61 of 1973); ‘designated settlement system’ means a settlement system designated in terms of section 4A; ‘designated settlement system operator’ means the person specified in the notice referred to in section 4A(5) as the operator of that system; ‘designated settlement system participant’ means- (a) a person that is a participant in the designated settlement system in accordance with the rules governing the operation of the system; or ( b ) a person that is an operator of the designated settlement system;”; 20 15 10 (b) by the substitution for the definition of “netting” of the following definition: “ ‘netting’ means the determination of the nett payment obligations between two or more settlement system participants within a payment clearing house or the determination of the nett settlement obligations between two or more settlement system participants within [the 25 payment] a settlement system;”; ( c ) by the substitution for the definition of “payment clearing house” of the following definition: GAZETTE, No. GOVERNMENT 26949 4 30 OCTOBER 2004 ~ Act No. 22,2004 NATIONAL PAYMENT SYSTEM AMENDMENT ACT, 2004 “ ‘payment clearing house (PCH)’ means an arrangement between two or more Reserve Bank settlement system participants, excluding a designated settlement system operator, governing the clearing or netting of payment instructions between those Reserve Bank settlement system participants;”; 5 (d) by the substitution for the definition of “payment instruction” of the following definition: “ ‘payment instruction’ means an instruction to [a system participant to] transfer funds or make a payment;”; (e) by the substitution for the definition of “payment obligation” of the following 10 definition: “ ‘payment obligation’ means an indebtedness that is owed by one settlement system participant to another as a result of the clearing of one or more payment instructions;”; (f) by the substitution for the definition of “payment definition: system” of the following 15 “‘payment system’ means a system that enables payments to be effected [between a payer and a beneficiary] or facilitates the circulation of money and includes any instruments and procedures that relate to the system;”; 20 (g) by the insertion after the definition of “payment system management body” of the following definition: “ ‘PCH system operator’ means a person, other than a designated two or more settlement system operator, that clears on behalf of any Reserve Bank settlement system Participants;”; 25 ( h ) by the substitution for the definition of “person” of the following definition: “ ‘person’ includes a trust; (i) by the insertion after the definition of ‘Reserve Bank’ of the following definitions: “ ‘Reserve Bank settlement system’ means a settlement system established and operated by, or under the control of, the Reserve Bank; ‘Reserve Bank settlement system participant’ means- (a) the Reserve Bank; (b) a bank, a mutual bank or a branch of a foreign institution; or (c) a designated settlement system operator, that participates in the Reserve Bank settlement system; ‘settlement’ means the discharge of settlement obligations;”; ( j ) by the substitution for the definition of “settlement instruction” of the 30 35 following definition: instruction given to [the] 5 40 “ ‘settlement instruction’ means an settlement system by a settlement system participant or by a [payment clearing house] PCH system operator on behalf of a Reserve Bank settlement system participant to effect settlement [of one or more payment obligations or to discharge any other obligation of one system 45 system to another participant (k) by the substitution for the definition of participant];”; “settlement obligation” of the following definition: “ ‘settlement obligation’ means an indebtedness that is owed by one settlement system participant to another as a result of one or more settlement instructions;”; 50 (1) by the substitution for the definition of “settlement system” of the following definition: “ ‘settlement system’ means a system [established and operated by the Reserve Bank] or settlement obligations or the discharge of payment and between [system] participants in that system;”; for the discharge of payment settlement obligations 55 - (m) by the insertion after the definition of “settlement system” of the following definition: “ ‘settlement system participant’ means- ( a ) a Reserve Bank settlement system participant; or (b) a designated settlement system participant;”; 60 6 GOVERNMENT No. 26949 GAZETTE, 30 OCTOBER 2004 Act No. 22,2004 NATIONAL PAYMENT SYSTEM AMENDMENT ACT, 2004 ( n ) by the insertion after the definition of “South African Reserve Bank Act” of the following definition: “ ‘systemic risk’ means the risk that failure of one or more settlement system participants, for whatever reason, to meet their payment obligations or their settlement obligations may result in any or all of the other settlement system participants being unable to meet their respec- tive payment or settlement obligations;”; 5 (0) by the substitution for the definition of “system operator” of the following definition: ‘‘ ‘system operator’ means a person, other than a designated settlement 10 system operator, authorised in terms of section 4(2)(c) [authorised by the payment system management body] to provide [clearing process- ing] services [on behalf ofl to any two or more [system participants or a payment clearing house] instruc- tions.”; and persons in respect of payment 15 ( p ) by the deletion of the definition of “system participant”. Amendment of section 2 of Act 78 of 1998

2. Section 2 of the principal Act is hereby amended by the substitution for paragraph (b) of subsection (3) of the following paragraph: “(b) may at any time be withdrawn in writing by [that] the board.”. 20 Amendment of section 3 of Act 78 of 1998

3. Section 3 of the principal Act is hereby amended- (a) by the substitution for subsection (2) of the ,following subsection- “ ( 2 ) The Reserve Bank may recognise a payment system management body as contemplated in subsection (1) if [that Bank] the Reserve Bank 25 is satisfied that- ( a ) the payment system management constituted, fairly represents the interests of [all banks, mutual banks and branches of foreign institutions participating in the payment system] &s members; body, as 30 (c) (b) the deed of establishment or constitution, as the case may be, and the rules of the payment system management body, including the rules relating to admission as members of that body, are fair, equitable and transparent; and [it] the payment system management body will [be enabled] enable 35 the Reserve Bank to adequately oversee the affairs of the payment system management body and assist the Reserve Bank in the discharge of the Reserve Bank’s responsibili- ties, specified in section lO(l)(c)(i) of the South African Reserve Bank Act, regarding the monitoring, regulation and supervision of 40 payment, clearing and settlement systems.”; its members and will 8 No. 26949 GOVERNMENT GAZETTE, 30 OCTOBER 2004 Act No. 22,2004 NATIONAL PAYMENT SYSTEM AMENDMENT ACT, 2004 (b) by the insertion of the following subsection after subsection (2): “(2A) (a) The Reserve Bank may, if it is no longer satisfied that the payment system management body complies with the requirements specified in subsection (2) and after it has consulted with the members of the payment system management body, withdraw its recognition of the payment system management body. (b) Such withdrawal no way affect any arrangements made, including rules and agreements, or authorisations given by the payment system management body prior to such with- drawal, unless otherwise determined of recognition will in Reserve Bank.”; by the (c) by the substitution for subsection ( 3 ) of the following subsection: 5 10 “(3) Besides the Reserve Bank, the following may also be members of a payment system management body: (a) A bank, mutual bank or branch of a foreign institution; and (b) an institution or body referred to in section 2 of the Oanks Act, 1990, 15 and in paragraph (&)ti) of the definition of ‘the business of a bank’ in section 1 of that Act, that complies with the entrance and other applicable requirements laid down in the rules of the pavment system management body.”; (d) by the insertion of the following subsection after subsection (3): 20 “(3A) The institutions or bodies referred to in subsection (3)(b) that comply with the entrance criteria for limited membership as recom- mended by the payment system management body and approved by the Reserve Bank in terms of section 4(2)(c)(i), may be granted limited membership by such body.”; (e) by the substitution for subsection (4) of the following subsection: a payment system management 25 “(4) No [body, member of that body or any other person] person may participate in the Reserve Bank settlement system unless- (a) such person is the Reserve Bank, a bank, a mutual bank or a branch of a foreign institution and, in the case [of that] where a payment 30 system management body[, the body is] has been recognised by the Reserve Bank as [a payment system management bods in terms ofJ contemplated in subsection( l), such person is a member of the payment system management body so recognised: or (b) [in the case of that other person, the person is a member of a 35 payment system management body recognised by the Reserve Bank as contemplated in paragraph (a)] is a designated settlement system operator.”; and such person cfl by the addition of the following subsection: “(5) No person may be allowed to clear as contemplated in section 40 4(2)(d)(i) unless, in the case where a payment system managementbody has been recognised by the Reserve Bank as contemp1a:ed in subsection (l), such person is a member of the payment system management body so recognised. ” . Amendment of section 4 of Act 78 of 1998 45

4. Section 4 of the principal Act is hereby amended- (a) by the substitution, in subsection (1), for the words preceding paragraph (a) of the following words : “The objects of the payment system management body are to organise, manage and [control] regulate, in relation to its members, all matters 50 affecting payment [obligations and the clearing or netting of payment obligations] instructions and, in connection with those objects-”; ( 6 ) by the substitution for subsection (2) of the following subsection: “(2) In addition to any other provisions thereof, the rules of the payment system management (a) to admit members and to regulate, control and, with the approval of empower that body- body must 55 the Reserve Bank, terminate membership; 10 No. 26949 GOVERNMENT GAZETTE, 30 OCTOBER 2004 Act No. 22,2004 NATIONAL PAYMENT SYSTEM AMENDMENT ACT, 2004 5 (b) to constitute, establish or dissolve any body, committee or forum consisting of its members and which has an impact on, [interfaces] interacts with, has access to or makes use of payment, clearing or settlement systems or operations; t o - fc) (i) [determine the] recommend for approval by the Reserve Bank, criteria subject to which any person is granted limited membership of the payment system management body or is to be authorised to act as a system operator operator within [the] a payment system [in order to provide 10 specific services to one or more members of the payment system management body or to act on behalf of those members]; and (ii) authorise that person e as [such] a system operator or PCH in accordance with (d) to [determine] recommend for approval by the Reserve Bank criteria subject to and in accordance with which a member that is also a Reserve Bank settlement system participant may be authorised to [introduce any person to provide payment ser- vices.]= those criteria; and system operator 20 15 (i) allow a bank, mutual bank or branch of a foreign institution that is not a Reserve Bank settlement system participant to clear; or (ii) clear on behalf of a bank, a mutual bank or a branch of a foreign institution that is not a Reserve Bank system participant: settlement 25 Provided that the member shall settle payment obligations on behalf a foreign institution referred of such bank, mutual bank or branch of to in subparagraphs (i) and (ii).”. Insertion of section 4A in Act 78 of 1998 30

5. The following section is hereby inserted in the principal Act after section 4: “Designated settlement systems 4A. (1) The Reserve Bank may designate a settlement system if such designation is in the interest of the integrity, effectiveness, efficiency or security of the payment system. (2) In considering the designation of any settlement system, the Reserve 35 Bank may require from the settlement system- ( a ) the rules of the settlement system; and (b) any additional information it may deem appropriate. (3) In considering the designation of a settlement system, the Reserve 40 Bank may have regard to any or all of the following matters: (a) The purpose and scope of the settlement system; (6) the rules of the settlement system; (c) any laws or regulatory requirements relating to the operation of the extent to which the settlement system settlement system, and the complies with those laws or regulatory requirements; (d) the importance of the settlement system to the national financial and payment system; ( e ) any other matters that the Reserve Bank considers appropriate. (4) The Reserve Bank must designate a settlement system as a designated settlement system for purposes of this Act by notice in the Gazette and give written notice of such designation to the designated settlement system operator. (5) The notice in the Gazette must specify- 45 50 (a) the settlement system that is the subject of the designation; 55 12 GOVERNMENT No. 26949 GAZETTE, 30 OCTOBER 2004 Act No. 22,2004 NATIONAL PAYMENT SYSTEM AMENDMENT ACT, 2004 (6) the person who is the operator of the settlement system that is the subject of the designation; and (c) any terms and conditions to which the designation is subject. (6) The Reserve Bank may vary or revoke any designation made under subsection (4)- (a) by amending or revoking any condition to which the designation is 5 subject; or (b) by making the designation subject to a new condition or new conditions. (7) In determining whether or not to vary or revoke a designation, the Reserve Bank may have regard to the matters mentioned in subsection (3) or any or all of the following: (a) Any failure to comply with any condition to which the designation is 10 subject; (b) whether or not the designated settlement system has ceased to operate; (c) whether or not the designated settlement system operator has 15 knowingly furnished information or documents which are false or misleading in any material respect to the Reserve Bank in connection with the designation of the system; (d) whether or not it is in the public interest to revoke the designation; ( e ) any other matters that the Reserve Bank considers appropriate. (8) (a) No variation of the conditions to which a designation is subject or revocation of designation shall have retroactive effect. (b) The variation or revocation shall not affect the validity or enforceability of the rules of the designated settlement system, nor shall it affect any payment to or out of the account of a settlement system participant or netting or settlement that took place, prior to the coming into effect of the variation or revocation. (9) The Reserve Bank shall, after having given written notice to the designated settlement system operator, vary or revoke the designation of the settlement system by notice in the Gazette.”. 10 15 30 Substitution of section 5 of Act 78 of 1998

6. The following section is hereby substituted for section 5 of the principal Act: “Settlement provision 5. (1) Settlement is effected in money or by means of entries passed through the Reserve Bank settlement system or a designated settlement system. (2) A settlement that has been effected in money or by means of an entry to the credit of the account maintained by a settlement system participant in the Reserve Bank settlement system or a designated settlement system is final and irrevocable and may not be reversed or set aside. (3) An entry to or payment out of the account of a designated settlement system participant to settle a payment designated settlement system is final and irrevocable and may not reversed or set aside.”. or settlement obligation in a be Amendment of section 6 of Act 78 of 1998

7. Section 6 of the principal Act is hereby amended by the substitution for subsection (1) of the following subsection: “( 1) No person may clear payment instructions unless that person is a [system participant.]= fa) Reserve Bank settlement system participant; or ( b ) bank, mutual bank or branch of a foreign institution that is allowed to clear in 50 terms of section 4(2)(d)(i).”. GOVERNMENT 26949 14 No. GAZETTE, 30 OCTOBER 2004 Act No. 22,2004 NATIONAL PAYMENT SYSTEM AMENDMENT ACT, 2004 Substitution of section 7 of Act 78 of 1998

8. The following section is hereby substituted for section 7 of the principal Act: “Payments to third persons

7. A person may as a regular feature of that person’s business accept instructions from any other person for purposes of money or payment making payment on behalf of that other person to a third person to whom that payment is due, if- (a) the first-mentioned person is the Reserve Bank, a bank, mutual bank, settlement system branch of a foreign institution, or a designated operator; or (b) the first-mentioned person is the postal company defined in section 1 of the Post Office Act, 1958 (Act No. 44 of 1958), or the Postbank as defined in section 5 1 of the Postal Services Act, 1998 (Act No. 124 of 1998); or the money is accepted or payment made in accordance with directives to time in terms of section 12.”. issued by the Reserve Bank from time (c) Substitution of section 8 of Act 78 of 1998

9. The following section is hereby substituted for section 8 of the principal Act: 5 10 15 “[Netting agreements and netting rules] Curatorship or liquidation 8. (1) The provisions of this section apply despite anything to the contrary in the law relating to insolvency or in the Companies Act, the Banks Act or the Mutual Banks Act. 20 (2) If [a system participant is wound up or placed under judicial management or] a curator or similar official is appointed to a settlement system participant, the curator or similar official is bound by any= @ provision contained in [a written netting agreement] the settlement system rules or in clearing, netting and settlement agreements to which that settlement system participant is a party, or any [netting] rules and practices applicable to the settlement system participant & 30 relation to such agreements[, is binding upon the liquidator, judicial manager or curator as the case may be, in respect of any payment or settlement obligation - (a) which has been determined through netting prior to the 25 (b) which is to be discharged on issue of the winding-up order or judicial management order or the appointment of the curator, as the case may be; and of the or the ap- be, or the winding-up order, judicial management order pointment of the curator, as the case may discharge of which was overdue on the date of the wind- of ing-up order, judicial management order or appointment the curator, as the case may be.]: and or after the date 35 40 ( b ) payment or settlement that is final and irrevocable in terms of sec- tion 5(2) or (3). ( 3 ) A curator or similar official appointed to a settlement system participant may give written notice to the Reserve Bank to withdraw such participant’s participation in the Reserve Bank settlement system, in which event such settlement system participant shall no longer be entitled to clear or participate in the Reserve Bank settlement system, other than for purposes of discharging payment or settlement obligations in accordance settlement system rules or clearing, netting and settlement with the 45 50 16 No. 26949 GOVERNMENT GAZETTE, 30 OCTOBER 2004 Act No. 22,2004 NATIONAL PAYMENT SYSTEM AMENDMENT ACT, 2004 agreements to which that settlement system participant is a party, or an! rules and practices applicable to the settlement system participant ir relation to such agreements. (4) When an application for the winding-up of a Reserve Bank settlemen system participant is made, a copy of- (a) the application for winding-up, when it is presented to the court; anc (b) any subsequent winding-up order, when it is granted, must be lodged with the Reserve Bank as soon as practicable. of an (5) When a copy application for winding-up or subsequenl winding-up order is lodged with the Reserve Bank in te;ms of subsectior (4) and the Reserve Bank settlement system participant in respect of whorr the copy is lodged is a designated settlement system participant, the Reserve Bank must as soon as practicable after having received the copy. notify the designated settlement system operator. 5 10 ( 6 ) If a settlement system participant is wound up, the liquidator 01 15 similar official is bound by- (a) any provision contained in the rules of the settlement system or in clearing, netting and settlement agreements to which that Settlement system participant is a party, or any rules and practices applicable to the settlement system participant in relation to such agreements; and irrevocable in terms of (b) any payment or settlement that is final and section 5 ( 2 ) or (3). (7) A settlement system participant in respect of whom a copy of a lodged with the Reserve Bank in terms of winding-up order has been subsection (4) must no longer be entitled to clear or participate in any settlement system, other than for purposes of discharging payment or settlement obligations in accordance with the rules of the settlement system or clearing, netting and settlement agreements to which that settlement system participant is a party, or any rules and practices applicable to the settlement system participant in relation to such agreements. (8) Notwithstanding any written law or rule of law, a court shall not recognise or give effect t o - (a) an order of a court exercising jurisdiction under the law of insolvency in a place outside the Republic of South Africa; or (6) an act of a person appointed in a place outside the Republic of South Africa to perform a function under the law of insolvency there, in so far as the making of the order or doing of the act would be prohibited under this Act for a court in the Republic of South Africa or a curator or similar official or liquidator or similar official.”. Substitution of section 9 of Act 78 of 1998

10. The following section is hereby substituted for section 9 of the principal Act: “Utilisation of assets provided as security to relating

9. Despite anything the contrary in any law to insolvency, any asset of a settlement system participant which was provided prior to the issue of any order for that settlement system participant’s or the designated winding-up by that participant to the Reserve Bank settlement system operator as security for a loan in respect of its settlement by the Reserve Bank or the designated obligations, may be utilised settlement system operator, as the case may be, to the extent required for the discharge of those settlement system settlement obligations of the participant.”. ,O !5 IO 15 40 45 50 18 No. 26949 GAZETTE, GOVERNMENT ~ ~~~~~ 30 OCTOBER 2004 Act No. 22,2004 NATIONAL PAYMENT SYSTEM AMENDMENT ACT, 2004 Amendment of section 10 of Act 78 of 1998

11. Section 10 of the principal Act is hereby amended- ( a ) by the substitution for subsection (1) of the following subsection: “( 1) The Reserve Bank has access to any information relating to [the or volumes or values of payment and settlement instructions payment and settlement obligations] system and the Reserve Bank settlement system, and [system participants] any person must on request provide such information to the Reserve Bank in such form a d at such times as the Reserve Bank may require.”; a payment 5 (b) by the substitution for paragraph (b) of subsection (2) of the following 10 paragraph: “(b) identifying a specific Reserve Bank settlement system partici- pant,”; ( c ) by the substitution for subsection ( 3 ) of the following subsection: “(3) Despite subsection (2) of this section and section 33 of the South African Reserve Bank Act, the Reserve Bank may disclose any information of which the disclosure is necessary to protect the integrity, effectiveness or security of the payment system, or if required by law to do so;”. Amendment of section 11 of Act 78 of 1998

12. Section 11 of the principal Act is hereby amended- ( a ) by the substitution for subsections (2), ( 3 ) , (4), ( 5 ) and (6) of the following subsections, respectively: 15 20 “(2) If any Reserve Bank settlement system participant considers itself [wronged] aggrieved by a decision taken by the Reserve Bank under a provision of this Act, the matter is deemed to constitute a dispute between that Reserve Bank settlement system participant and- the Reserve Bank. which dismte must be settled as urovided in this section. (3) The Reserve Bank-settlement system participant concerned must, within three ( 3 ) months after the decision of the Reserve Bank, in writing, furnish the Reserve Bank with full particulars of its grievance, and thereafter the Reserve Bank settlement system participant and the Reserve Bank must attempt to settle the dispute by consensus within seven business days of the receipt by the Reserve Bank of those particulars. 25 30 35 (4) If the Reserve Bank settlement system participant and the Reserve Bank do not succeed in settling the dispute as contemplated in subsection (3), they may agree to attempt to settle the dispute by mediation within a further period of 10 business days. (5) Mediation as contemplated in subsection (4) means a process 40 whereby- the Reserve Bank settlement system participant concerned and the Reserve Bank agree on a mediator; the mediator familiarises himself or herself with the position held by the Reserve Bank settlement system participant concerned and the Reserve Bank, respectively; the mediator, the Reserve Bank settlement system participant concerned and the Reserve Bank discuss the dispute at a meeting attended by them all; the Reserve Bank settlement system participant concerned and the Reserve Bank at or following such meeting attempt to settle the dispute by consensus; and the Reserve Bank settlement system participant concerned and the Reserve Bank share the mediator’s costs equally.”; 45 50 20 No. 26949 GOVERNMENT GAZETTE, 30 OCTOBER 2004 Act No. 22,2004 NATIONAL PAYMENT SYSTEM AMENDMENT ACT, 2004 (6) If the Reserve Bank settlement system participant concerned and to settle the dispute by consensus as the Reserve Bank are unable contemplated in either subsection (3) or ( 5 ) , the dispute must be referred- ( a ) to a single arbitrator to be agreed on between the Reserve Bank settlement system participant and the Reserve Bank; or (b) failing such agreement, to an arbitrator appointed at the request of 5 the Reserve Bank settlement system participant and the Reserve Bank by a recognised body concerned with the facilitation and promotion cf the resolution of disputes by means of mediation or 10 arbitration.”; and (b) by the substitution for subsection (9) of the following subsection: “(9) The decision of the arbitrator is final and binding on the Reserve Bank settlement system participant concerned and the Reserve Bank.”. Amendment of section 12 of Act 78 of 1998

13. Section 12 of the principal Act is hereby substituted for the following section- “( 1) The Reserve Bank may from time to time, after consultation with the payment system management body, issue directives to any person regarding a payment system or the application of the provisions of this Act. (2) In considering whether or not to issue a directive in terms of subsection (I), the Reserve Bank may have regard to any or all of the following aspects: (a) That reasonable grounds exist to believe that any person is engaging in or is about to engage in any act, omission or course of conduct, with respect to the payment system, that results or is likely to result in systemic risk; (b) that reasonable grounds exist to believe that any person is engaging in or is about to engage in any act, omission or course of conduct, with respect to the payment system that is or will be contrary to the public interest relative to the integrity, effectiveness, efficiency or security of the payment system; (c) the public interest; (d) the integrity, effectiveness, efficiency or security of the payment system; (e) national financial stability; v) any other matters that the Reserve Bank considers appropriate. (3) The Reserve Bank may in writing, over and above any directive contemplated in subsection (I), issue a directive to a person requiring such person, within the period specified in the directive, t e - (a) cease or refrain from engaging in the act, omission or course of conduct or perform such other acts as are necessary to remedy the situation; or (b) perform such acts as are necessary to comply with the directive or to effect the changes; or (c) provide the Reserve Bank with such information and documents, relating to the matter as specified in the directive. (4) The provisions of this section shall not apply to a designated settlement system. 15 20 25 30 35 40 (5) The Reserve Bank may, after consultation with the payment system 45 management body, cancel in writing any previously issued directives. (6) In considering whether or not to cancel a directive in terms of subsection ( 5 ) , the Reserve Bank must have regard to the factors referred to in subsection (2). (7) No directive issued by the Reserve Bank shall have any retroactive effect. (8) Any person who neglects, refuses or fails to comply with a directive issued under subsection (1) or (3) is guilty of an offence. 50 I 22 No. 26949 GOVERNMENT GAZE’ITE, 30 OCTOBER 2004 Act No. 22,2004 NATIONAL PAYMENT SYSTEM AMENDMENT ACT, 2004 (9) (a) A directive issued in terms of subsection (1) takes effect three months after it has been issued or on such earlier date as may be determined by the Reserve Bank. (b) A directive issued in terms of subsection (3) takes effect immediately.”. Amendment of section 13 of Act 78 of 1998

14. Section 13 of the principal Act is hereby amended- (a) by the substitution for subsection (1) of the following subsection: “ I (1, Despite anything to the contrary in any [legislation] relating to the retention of records, the Reserve Bank; Reserve Bank settlement system [and system] participants, PCH system operators and system operators must retain all records obtained by them during the course of the operation and administration of [the] a payment or Reserve Bank settlement system for a period of five years [as] from the date of each particular record.”; 5 10 (b) by the substitution for subsection (2) of the following subsection: 15 “(2) Subsection (1) shall not apply to a designated settlement system operator, and any obligation of such a settlement system in relation to the retention of records shall be specified as a condition of the designation of such a settlement system under section 4A(5).”; and (c) by the addition of the following subsection: 20 “(3) The retention of records in terms of subsection (1) may be effected as envisaged in section 16 of the Electronic Communications and Transactions Act, 2002 (Act No. 25 of 2002).”. Insertion of Section 13A in Act 78 of 1998

15. The following section is hereby inserted in the principal Act after section 13: 25 “Application for court order

13A. Irrespective of whether criminal proceedings have been or may be instituted against a person in respect of an offence in terms of any section of this Act, the Reserve Bank may apply to a High Court having jurisdiction for an order directing a person to comply with this Act or a directive issued in terms of this Act.”. 30 Substitution of section 14 of Act 78 of 1998

16. The following section is hereby substituted for section 14 of the principal Act: “Penalties

14. Any person convicted of an offence referred to in- ( a ) section 6(2)[, 7(5)] or [12(3)] 1 2 0 , is liable to a fine not exceeding R1 million or to imprisonment for a period not exceeding five years, or to both such fine and such imprisonment; [or] (b) section 10(4), is liable to a or to imprisonment for a period not exceeding [six months] two years, or to both [such] 2 fine and such imprisonment.”. fine [not exceeding R1 0001 35 40 Short title

17. This Act is called the National Payment System Amendment Act, 2004.