CBUAE Large Value Payment Systems (LVPS) Regulationchapter by chapter

Annex A: Licensing Application Information/Documents

Large value payment system license applications must include operating rules, ownership and management details, contingency plan, three years of annual reports, and member lists.

Annex B: SO/SI Information

System Operators and Settlement Institutions applying for licence or designation must provide name, legal form, incorporation details, registered office, contacts, management responsibilities, and an organization chart.

Annex C: LVPS Turnover Information

The LVPS must provide daily turnover information on aggregate value, average value and number of transfer orders transferred, cleared or settled.

Annex D: Post-Designation Information to Central Bank

Following designation, system operators and settlement institutions must give the Central Bank staged post-designation information, including liquidity commitments, credit ratings, fees, outsourcing plans, and audit reports.

Article 2.1-2.2Article 2: Licensing Requirements

Any person operating a large value payment system in the State must first obtain a licence from the Central Bank, applying with the information and documents required by Annex A and other Central Bank requirements.

Article 3.1-3.3Article 3: Eligibility and Criteria for Designation

The Central Bank designates a financial infrastructure system as systemically important based on transaction value and volume, alternatives available, and failure impact, and may designate on its own initiative.

Article 4.1-4.6Article 4: Designation Process

The Central Bank must notify a Systemic Operator or Systemic Institution in writing of a proposed systemic importance designation, allow representations, then issue a written final decision.

Article 4.7-4.9Article 4: Designation Process

Central Bank-operated or related financial infrastructure systems meeting designation criteria are deemed licensed and designated as LVPS without separate application, subject to ongoing requirements.

Article 5.1-5.2Article 5: Cooperation with Regulatory Authorities

The Central Bank may cooperate with other regulatory authorities for oversight purposes when an LVPS is licensed by them.

Article 6 (Effect of revocation)Article 6: Revocation of License and Designation - Effect

Revocation of a licence or designation of a large value payment system does not affect transactions already cleared and settled before the revocation takes effect.

Article 6 (Grounds for revocation)Article 6: Revocation of License and Designation - Grounds

The Central Bank may revoke an LVPS licence or designation on any grounds it considers appropriate, including failure to meet designation or licensing criteria or comply with the Regulation or Central Bank Law.

Article 6 (Revocation process, incl. objection rights)Article 6: Revocation of License and Designation - Process

The Central Bank must notify a system operator or settlement institution in writing before revoking a licence or designation, and that party may object to the Grievances and Appeals Committee.

Article 7.1-7.4Article 7: Settlement Finality

Settlement finality makes a transfer irrevocable and unconditional, barring reversal of Transfer Orders in a Large Value Payment System, and netting of insolvent parties' obligations must be considered.

Article 8.1-8.3Article 8: Ongoing Requirements - Principal Requirements

Operators and settlement institutions of designated large value payment systems must follow Central Bank instructions and international standards such as PFMI, and the Central Bank may grant exemptions and appoint expert advisors.

Article 8.4.1: Submission of Designation Particulars

Systemic Operator and Systemic Institution must notify the Central Bank in writing of designation particulars within 14 working days of designation, and report later changes within 14 days.

Article 8.4.2: Safety and Efficiency Compliance

Systems operators and settlement institutions of designated LVPS must meet safety, efficiency, compliance and financial resource requirements; major Operating Rules changes need prior Central Bank approval.

Article 8.4.3: Submission of Information or Documents

The Central Bank may request information or documents from the System Operator, System Integrator, or Participant Person during oversight, which must be submitted within the specified timeframe.

Article 8.4.4: Central Bank Examination Rights

The Central Bank may examine books, accounts and transactions of designated large value payment system operators and institutions at any time on short prior notice.

Article 8.4.5: Auditor Report Requirement

The Central Bank may require system operators, settlement institutions or participant persons to submit auditor reports on specified matters, prepared only by Central Bank-approved auditors.

Article 8.4.6: Central Bank Compliance Direction

The Central Bank may direct operators of a designated large value payment system to take compliance actions, stating concerns, required actions, basis and compliance period.

Article 8.4.7: Operating Rules - Participant Disclosure

Large value payment system operators must provide operating rules giving participants sufficient information on their rights and obligations, with default arrangements clearly defined and disclosed.

Article 8.4.8: Settlement Finality Rules and Procedures

The SI must set rules in the Operating Rules for final settlement by the intended settlement time, ensuring certainty over when Transfer Orders become final and settled.

Article 8.4.9: Default Arrangements - Information Sharing

The Central Bank may direct system operators and settlement institutions to share default-related information with a nominated official, and participants' liability for default losses must be clearly defined.

Article 9 Principles 1-2Article 9: PFMI Compliance - Legal Basis and Governance

Systemically important payment systems must establish a clear legal framework and transparent governance to ensure safety and stability.

Article 9 Principles 3-6Article 9: PFMI Compliance - Risk Management Framework, Credit, Collateral and Liquidity Risk

Systemically important LVPS must maintain a sound risk management framework, manage credit and liquidity risk, accept only low-risk conservatively haircut collateral, and hold liquidity for stress scenarios including largest-participant default.

Article 9 Principles 7-9Article 9: PFMI Compliance - Settlement (Finality, Money Settlement, Exchange-of-Value)

A systemically important payment system must provide final settlement by end of value date, settle in central bank money where practical, and eliminate principal risk in linked obligations.

Article 9 Principles 10-11Article 9: PFMI Compliance - Participant Default and General Business Risk

Systemically important large value payment systems must have clear participant-default rules and sufficient equity-funded liquid net assets to cover general business risk and enable orderly wind-down.

Article 9 Principles 12-13Article 9: PFMI Compliance - Custody/Investment and Operational Risk

Systemically important LVPS must protect assets and manage operational risks with secure, reliable systems and business continuity plans.

Article 9 Principles 14-17Article 9: PFMI Compliance - Access, Tiered Participation, FMI Links and Efficiency

A systemically important large value payment system must maintain objective, risk-based, publicly disclosed participation criteria, manage tiered participation and FMI link risks, and be efficient and effective for participants and markets.

Article 9 Principles 18-19Article 9: PFMI Compliance - Communication Procedures and Disclosure

Systemically important large value payment systems must use or accommodate international communication standards and disclose all rules, key procedures, risks and fees to participants.

Article 9.1-9.7Article 9: PFMI Compliance - Applicability

Designated large value payment systems must observe the CPMI-IOSCO Principles for Financial Market Infrastructures, and the Central Bank may impose higher requirements based on specific system risks.

Article 9.27-9.28Article 9: PFMI Compliance - CPMI Wholesale Payments Fraud Strategy

The Central Bank requires designated LVPS operators (SO and/or SI) to consider the CPMI wholesale payments endpoint security fraud strategy and its amendments when implementing LVPS security measures.

Article 10: Enforcement and Sanctions

Violating the Regulation or any offence under the Central Bank Law may expose the SI or SO to administrative and financial sanctions set by the Central Bank.

Article 11.1-11.3Article 11: Appeal Mechanism

Persons may appeal Central Bank decisions on LVPS licensing, designation, revocation, suspension or enforcement actions to the Grievances & Appeals Committee by written referral stating review grounds.

Article 12.1-12.2Article 12: Transition Period

Existing LVPS operators have one year to comply with new regulations, needing a Central Bank License before the transition period ends.