NATIONAL PAYMENT SYSTEMS ACT

Arrangement of Sections

   Section

PART I
PRELIMINARY

   1.   Short title

   2.   Interpretation

   3.   Application

PART II
PAYMENT SYSTEMS REGULATION

   4.   Functions of Bank of Zambia

   5.   Regulation, oversight and designation of payment systems

   6.   Requirements for designation

   7.   Application for designation of payment system

   8.   Existing payment systems

   9.   Directives by Bank of Zambia

   10.   Participation of Bank of Zambia in payment systems

PART III
PAYMENT SYSTEMS BUSINESS

   11.   Regulation and oversight of payment system business

   12.   Designation of payment system business

   13.   Restriction on payment system business

PART IV
PRESENTMENT AND ELECTRONIC TRANSMISSION OF CHEQUES

   14.   Presentment of cheque for payment

   15.   Alternative means of presentment of cheques

   16.   Admissibility of payment order

PART V
SETTLEMENTS

   17.   Validity of clearing house rules etc.

   18.   Collateral

   19.   Suspension of participant due to inadequate collateral

   20.   Discharge of settlement obligations

   21.   Failure to settle arrangements

   22.   Application of Zambian law in certain proceedings

   23.   Winding-up of participants by court

   24.   Winding-up of participants by Bank of Zambia

PART VI
GENERAL AND ENFORCEMENT PROVISIONS

   25.   Netting agreements

   26.   Utilisation of collateral

   27.   Returns

   28.   Retention of records

   29.   Access to information and confidentiality

   30.   Documents

   31.   False documents

   32.   Misleading names

   33.   Dis-honoured cheques

   34.   Investigations

   35.   General offence and penalty and offences by body corporates

   36.   Validity of certain acts by participants

   37.   Immunity of Bank of Zambia officials

   38.   Exemptions

   39.   Disputes between participants

   40.   Decision of Bank of Zambia

   41.   Appeals and Appeal Tribunal

   42.   Regulations

   43.   Rules, guidelines or directives by Bank of Zambia

AN ACT

to provide for the management, administration, operation, supervision and regulation of payment, clearing and settlement systems; to empower the Bank of Zambia to develop and implement payment, clearing and settlement systems policy so as to promote efficiency, stability and safety of the Zambian financial system; and to provide for matters connected with or incidental to the foregoing.

[13th April, 2007]

Act No. 1 of 2007.

PART I
PRELIMINARY

1. Short title

This Act may be cited as the National Payment Systems Act.

2. Interpretation

   (1) In this Act unless the context otherwise requires—

“Bank of Zambia” means the Bank of Zambia established under the Bank of Zambia Act;

“bank” has the meaning assigned to it in the Banking and Financial Services Act;

“beneficiary bank” means a bank that receives funds as a result of a payment instruction or order;

“cheque” means a bill of exchange drawn on a banker payable on demand or at a fixed or determinable future time;

“chief executive officer” and “chief financial officer” shall have the meaning assigned to them in the Banking and Financial Services Act;

“clearing” means the receipt, exchange, and distribution of payment instructions, and “clear” shall be construed accordingly;

“clearing and settlement system” means a system or arrangement to clear or settle payment obligations or instructions in which —

      (a)   there are at least three participants, one of which is a bank;

      (b)   clearing or settlement is all or partly in Zambian Kwacha;

      (c)   the payment obligations that arise from clearing within the system or arrangement are ultimately settled through adjustments to the account of one or more participants at the Bank of Zambia or other settlement agent;

“clearing house” means a corporation, association, partnership or agency that provides clearing or settlement services for a designated payment system but does not include a stock exchange;

“clearing house rules” means the common rules or standardised arrangements issued by a clearing house for a payment system that has been approved by the Bank of Zambia under this Act;

“collateral” means an asset or third party commitment that is delivered by the participant and accepted by the clearing house to secure a settlement obligation;

“designate” means to appoint, assign or recognise a payment, clearing or settlement system, payment system business or participant;

“designated payment system” means a payment system designated by the Bank of Zambia under section 5;

“document” includes a record generated by, or stored in. an electronic medium;

“electronic medium” means any digital storage system that preserves records exclusively in a non-rewritable format, verifies the quality and accuracy of the recording process, serialises the units of storage media, creates a time date record whenever information is placed on the storage media and permits the immediate downloading of electronic data stored to any other media, including magnetic media, optical media, electronic media or any other such technology;

“electronic transmission” means the transfer of electronic data through guided or unguided electro-magnetic energy or other source from one electronic medium to another;

“failure to settle” means the inability to settle a settlement obligation by a participant by the minute in the hour and date stipulated in settlement arrangements;

“failure to settle arrangements” means measures agreed by the participants and approved by the Bank of Zambia to manage a failure to settle;

“finality of payment” means the irrevocable and unconditional crediting of funds to the account of a payee;

“finality of settlement” means the irrevocable and unconditional discharge of settlement obligations between participants;

“financial institution” has the meaning assigned to it in the Banking and Financial Services Act;

“intermediary” means any receiving bank or participant other than the paying bank or beneficiary bank;

“irrevocable” in relation to a payment or settlement instruction, means a payment or settlement that cannot be countermanded by the payer or paying bank or any other person;

“money” means a bank note or coin issued by the Bank of Zambia in accordance with the Bank of Zambia Act;

“netting” means the determination of net settlement obligations between two or more participants within a payment system;

“netting agreement” means an agreement within a payment system that provides for the netting of present or future payment obligations against the present or future rights to receive payments;

“netted balance” means an amount calculated in accordance with a netting agreement as the net debt payable by or on behalf of one party to the agreement to, or on behalf of. another party or parties to the agreement for any dealing or transaction under the agreement;

“participant” means a member of a payment system;

“paying bank” means a bank which receives a payment instruction;

“payment obligation” means an indebtedness that is owed by one participant to another as a result of the clearing of payment instructions;

“payment order” means an unconditional instruction, in any form, to a participant to place at the disposal of a beneficiary a fixed or determinable amount of money;

“payment instruction” means an instruction to transfer funds or make a payment;

“payment system” means a clearing and settlement system operating under clearing house rules;

“payment system business” means the business of providing money transfer or transmission services or any other business that the Bank of Zambia may prescribe as a payment system business;

“person” includes a company, a partnership, an association and a group of persons acting in concert, whether or not incorporated;

“purchased payment facility” means a facility purchased by one person from another in which value is stored, including an electronic purse or store of value facility;

“receiving bank” means a bank that receives payment instructions from a paying bank or other intermediary;

“settlement” means the discharge of settlement obligations by the Bank of Zambia or other settlement agent;

“settlement agent” means the Bank of Zambia or a bank that facilitates settlement between participants within a payment system;

“settlement cycle” means the period between two moments in time, within a calendar day, or across two or more calendar days, commencing with the initiation of a new settlement cycle date and ending at the moment of the initiation of the following settlement cycle date;