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2023-01-01

Instructions No. (1) of 2023 Concerning the E-Money Guarantee Account

The Palestine Monetary Authority issued Instructions No. (1) of 2023 to regulate the establishment and management of e-money guarantee accounts for licensed payment service companies. The directive mandates that companies deposit all e-money user funds into dedicated, audited guarantee accounts held at licensed banks, maintaining balances that strictly cover issued e-money liabilities while prohibiting the use of these accounts as collateral or for corporate debts. Furthermore, it requires monthly reporting, daily internal audits, and grants the Authority direct control over the accounts to safeguard user funds in cases of company insolvency or bank liquidation.

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Palestine Monetary Authority

PALESTINE MONETARY AUTHORITY

Instructions No. ( ) of 2023 Concerning the E-Money Guarantee Account

Pursuant to the provisions of Decision-Law No. (41) of 2022 Concerning National Payments, particularly Articles (9 and 18) thereof, and to the decision of the Board of Directors of the Palestine Monetary Authority in its meeting No. (258) dated 2023/01/25 and in accordance with the powers delegated to us, and in pursuit of the public interest, we have issued the following Instructions:

Article (1) Definitions

The words and phrases contained in these Instructions shall have the meanings assigned to them below, unless the context indicates otherwise:

  • E-Money: Electronic monetary value that constitutes an obligation on the issuer, issued in exchange for funds for the purpose of executing a payment order among users of payment services.
  • Payment Services: Services determined by the Palestine Monetary Authority relating to the sending, receiving, and execution of payment orders in circulating currencies, including the issuance and management of payment instruments and the operation of payment systems.
  • E-Money Guarantee Account: The company's account opened with any bank licensed by the Palestine Monetary Authority to cover the outstanding balance of e-money issued by the company in accordance with the conditions determined by the Palestine Monetary Authority.
  • Company: A payment services company registered in accordance with the provisions of the Law and licensed to provide payment services including the issuance of e-money.
  • E-Money User: A natural or legal person who uses e-money as a payer or payee, including agents and merchants.

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PALESTINE MONETARY AUTHORITY

Article (2) Objective and Scope of Application

  1. The provisions of these Instructions aim to specify the conditions and terms regarding the e-money guarantee account.
  2. The provisions of these Instructions apply to all companies licensed by the Palestine Monetary Authority to provide payment services.

Article (3) E-Money Guarantee Account

  1. The Company shall open an account with a bank licensed by the Palestine Monetary Authority under the name "E-Money Guarantee Account", after obtaining the prior approval of the Palestine Monetary Authority for the account opening agreement, subject to the following: a. Depositing all funds received from e-money users into the e-money guarantee account. b. Ensuring that the balance of the e-money guarantee account at any time is not less than the balance of e-money issued to e-money users, including agents and merchants. c. Using the e-money guarantee account to settle outgoing and incoming financial movements of e-money. d. Opening the e-money guarantee account in the same currency as the issued e-money. e. Booking any commissions or fees related to the e-money guarantee account on the Company's other accounts.
  2. The Company may transfer any credited interest on the e-money guarantee account to its other accounts.

Article (4) Statements and Financial Reports

The Company shall comply with the following:

  1. Providing the Palestine Monetary Authority with a bank-certified account statement and an e-money issuance statement issued by the Company's systems on a monthly basis, no later than the fifth business day of each month, and at any other time specified by the Palestine Monetary Authority.
  2. Separating the Company's funds from the funds of the e-money guarantee account accounting-wise, in the financial statements and related notes, in compliance with International Financial Reporting Standards.
  3. Ensuring that the e-money guarantee account is subject to review and audit at the end of each business day by the Company.

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Palestine Monetary Authority

PALESTINE MONETARY AUTHORITY

Article (5) Enforcement on the E-Money Guarantee Account

  1. Enforcement shall not be carried out on the e-money guarantee account against any debts, dues, or any rights accrued to the Company, except for debts and dues pertaining to e-money users.
  2. The e-money guarantee account shall not serve as collateral for any facilities, financing, or obligations of the Company or any other person.

Article (6) Termination, Bankruptcy, or Liquidation

  1. The e-money guarantee account is exempt from the termination, bankruptcy, or liquidation procedures of the Company or the bank holding the e-money guarantee account, as stipulated by the provisions of the Law.
  2. The Palestine Monetary Authority may dispose of the balances available in the e-money guarantee account and take appropriate measures to return funds to users in the event that the Company is unable to meet its obligations or if the bank holding the e-money guarantee account is ordered to be liquidated.

Article (7) Repeal of Conflicting Provisions

  1. Article (5) of Instructions No. (3) of 2021 Concerning Payment Service Companies Providing E-Wallet Services is repealed, provided that the Company regularizes its status in accordance with the provisions of Article (8) of these Instructions.
  2. All provisions conflicting with these Instructions are repealed.

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Palestine Monetary Authority

PALESTINE MONETARY AUTHORITY

Article (8) Regularization of Status

The Company shall regularize its legal status in accordance with the provisions of these Instructions within a maximum period of (6) six months from the date of their issuance.

Article (9) Implementation and Enforcement

All competent authorities shall, each within their respective jurisdiction, implement the provisions of these Instructions, which shall apply from the date of their issuance. Issued in Ramallah on: 2023/01/31.

Dr. Firas Malham Governor [Signature]

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