Payment and Settlement Systems Act: Section 34A – Act to apply to designated trade repository and issuer

(1) The provisions of this Act shall apply to, or in relation to, a designated trade repository or issuer, as they apply to, or in relation to, payment systems to the extent applicable, subject to the modification that, throughout this Act, unless the context otherwise requires,–

(a) references to a “payment system” or “system provider” shall be construed as references to a “designated trade repository” or “issuer”, as the case may be;

(b) references to “commencement of this Act” shall be construed with reference to–

(i) a designated trade repository, as references to the date on which a trade repository is specified by the Reserve Bank as a designated trade repository; and

(ii) an issuer, as references to commencement of the Payment and Settlement Systems (Amendment) Act, 2015 (18 of 2015).

(2) The Reserve Bank may, on an application by a designated trade repository or otherwise, permit or direct the designated trade repository to provide such other services as are deemed necessary from time to time.

Explanation.–For the purposes of this section, the expression “designated trade repository” shall mean a trade repository or a class of trade repositories, as may be specified by the Reserve Bank from time to time.]

Simplified Explanation

Section 34A of the Payment and Settlement Systems Act, 2007 introduces the applicability of the Act’s provisions to designated trade repositories and issuers. It establishes how the Act’s provisions should apply to these entities, ensuring that the regulatory framework is extended to cover them in specific contexts.

Key Provisions:

1. Application of Provisions:
   • The provisions of the Payment and Settlement Systems Act apply to designated trade repositories and issuers in the same manner they apply to payment systems.
   • This means that the rules and guidelines in the Act that pertain to payment systems or system providers will also apply to designated trade repositories or issuers, with necessary modifications.
2. Modifications:
   • References to “payment system” or “system provider”:
     • These terms should be understood as referring to a designated trade repository or issuer, as applicable.
   • References to “commencement of this Act”:
     • For designated trade repositories, this refers to the date when a trade repository is specified by the Reserve Bank as a designated trade repository.
     • For issuers, this refers to the commencement of the Payment and Settlement Systems (Amendment) Act, 2015.
3. Reserve Bank’s Power:
   • The Reserve Bank has the authority to permit or direct a designated trade repository to provide additional services as necessary, upon application by the repository or as deemed appropriate by the Reserve Bank.
4. Definition of “Designated Trade Repository”:
   • A designated trade repository refers to a trade repository, or a class of such repositories, as specified by the Reserve Bank from time to time.

Practical Implications:

• Expanded Scope:
  • This section expands the scope of the Payment and Settlement Systems Act to cover trade repositories and issuers, aligning them with payment systems and system providers.
• Regulatory Coverage:
  • It ensures that designated trade repositories and issuers are subject to the same regulatory framework as payment systems, helping maintain consistency and clarity in the oversight of various entities in the financial sector.
• Flexibility for the Reserve Bank:
  • The Reserve Bank has the flexibility to regulate and oversee the services provided by designated trade repositories, ensuring that these entities follow required standards and practices to maintain systemic integrity.

Conclusion:

Section 34A of the Payment and Settlement Systems Act extends the provisions of the Act to designated trade repositories and issuers, with modifications to terms and the inclusion of a provision allowing the Reserve Bank to direct or permit additional services. This helps ensure that the regulatory framework is comprehensive and can adapt to the evolving needs of the financial infrastructure, including repositories that handle trade data and issuers.