Regulation No. 2017-08 on the Payment and Protest of Electronic Cheques

THE GENERAL DIRECTOR OF THE CENTRAL BANK OF THE REPUBLIC OF SAN MARINO

CONSIDERING that Sammarinese intermediaries participate, in compliance with operating rules, in the Italian payment system;

HAVING REGARD to Legislative Decree 27 October 2017, No. 123, titled "Definitional aspects of cheques and regulations regarding the request for payment and protest of cheques in electronic format";

HAVING REGARD to Article 39 of Law 17 November 2005, No. 165, which grants the Central Bank of the Republic of San Marino the power to issue measures containing binding and general provisions;

HAVING REGARD to the Statute of the Central Bank of the Republic of San Marino, Law 29 June 2005, No. 96, which provides in Article:

• Article 3, paragraph 1, letter d), that the Central Bank exercises its powers to facilitate economic and financial activity by establishing and maintaining efficient and secure payment systems for the Republic of San Marino;
• Article 37, paragraph 1, that to achieve its objectives, the Central Bank is assigned the functions of management, regulation, and supervision of the payment system of the Republic of San Marino;
• Article 38, paragraph 1, that the Central Bank ensures that the payment system operates in a safe, stable, and efficient manner, adopting all measures and methods that the Central Bank deems necessary to ensure the efficiency and stability of the Sammarinese payment system;
• Article 38, paragraph 2, that the Central Bank may delegate to third parties the management of the IT infrastructure of the payment system;

HAVING REGARD to Article 2, paragraph 1, point c), and paragraph 2 of Law 29 May 2013, No. 58;

HAVING REGARD to the resolutions of the Supervision Coordination and the Board of Directors by which the text of Regulation No. 2017-08 was approved;

ISSUES the attached Regulation No. 2017-08, which enters into force on 29 January 2018.

San Marino, 14 December 2017 Signed: THE GENERAL DIRECTOR Adv. Roberto Moretti

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REGULATION FOR THE PAYMENT AND PROTEST OF THE ELECTRONIC CHEQUE year 2017 / number 08

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Central Bank of the Republic of San Marino Regulation No. 2017-08 for the payment and protest of the electronic cheque

INDEX

PART I DEFINITIONS AND SCOPE OF APPLICATION ..............................................................................................4 Article 1 - Legislative Sources ..................................................................................................................................4 Article 2 - Definitions .........................................................................................................................................4 Article 3 - Scope of Application ....................................................................................................................4

PART II DEMATERIALIZATION AND SUBSTITUTE CONSERVATION .....................................................5 Article 4 - Generation of the cheque image .......................................................................................5 Article 5 - Conservation of the cheque image ....................................................................................5 Article 6 - Registration on IT support ..................................................................................................5 Article 7 - Conservation and availability of paper instruments ............................................................................5

PART III PRESENTATION FOR PAYMENT ...................................................................................................6 Article 8 - Electronic presentation for payment of the cheque ..................................................6 Article 9 - Data to be transmitted ............................................................................................................................6 Article 10 - Timeframes ................................................................................................................................................7 Article 11 - Unpaid cheques ..........................................................................................................................7

PART IV NON-PAYMENT AND PROTEST .............................................................................................7 Article 12 - Transmission of data for the purpose of protest issuance ................................................................7 Article 13 - Protest issuance .........................................................................................................................8

PART V DELIVERY OF DOCUMENTATION AND COMMUNICATIONS TO AUTHORITIES..............................8 Article 14 - Delivery of documentation .......................................................................................................8 Article 15 - Communications to authorities ...........................................................................................................9

PART VI TECHNICAL-IT REQUIREMENTS AND OUTSOURCING ................................................9 Article 16 - Technical-IT requirements .........................................................................................................9 Article 17 - Third parties ........................................................................................................................................9

PART VII SANCTIONS ..............................................................................................................................................10 Article 18 - Administrative sanctions ...............................................................................................................10

PART VIII ENTRY INTO FORCE ........................................................................................................................10 Article 19 - Entry into force............................................................................................................................10

Central Bank of the Republic of San Marino Regulation No. 2017-08 for the payment and protest of the electronic cheque

PART I DEFINITIONS AND SCOPE OF APPLICATION

Article 1 - Legislative Sources

1. This Regulation, governing the request for payment and protest of the electronic cheque, finds its source in Legislative Decree 27 October 2017, No. 123.

Article 2 - Definitions

1. For the purposes of this Regulation, the expressions used shall be understood with the following meaning:
2. "cheque": bank cheque, prepaid cheque, and the "assegno traenza e quietanza" as defined by Legislative Decree 27 October 2017, No. 123, as well as foreign cheques or instruments assimilable to these;
3. "Central Bank" or "BCSM": the Central Bank of the Republic of San Marino;
4. "LD No. 123/2017": Legislative Decree 27 October 2017, No. 123;
5. "sanctions decree": Decree 30 May 2006 No. 76 and subsequent amendments and integrations;
6. "issuer": the bank or other Sammarinese subject authorized to issue a prepaid cheque for an amount available with said subject at the time of issuance, pursuant to Legislative Decree 27 October 2017, No. 123;
7. "cheque image": image copy of the cheque front and back on IT support, the conformity of which is guaranteed by the negotiator;
8. "intermediaries": the legal entities referred to in definitions 5, 8, and 9;
9. "negotiator": the bank or other Sammarinese subject authorized to negotiate a cheque following endorsement for collection, pursuant to Legislative Decree 27 October 2017, No. 123;
10. "drawee": the bank or other Sammarinese subject at which the account of the cheque drawer is held, pursuant to Legislative Decree 27 October 2017, No. 123.
11. In the remainder of the text, the use of defined terms is highlighted in UPPERCASE.

Article 3 - Scope of Application

1. Consistent with what is provided for in Article 3 of LD No. 123/2017 and with a view to defining the scope of application of the same Article 3, this Regulation, until otherwise provided by the CENTRAL BANK, applies:

• to CHEQUES provided they are drawn or issued on or by an INTERMEDIARY and negotiated on a foreign intermediary, or vice versa, on the premise of substantial assimilation of this legislation with the corresponding foreign legislation;
• to CHEQUES referred to in the previous bullet point provided they are denominated in euros;
• to INTERMEDIARIES that avail themselves of the option provided for in Article 4 of LD No. 123/2017.

2. The conditions set out in the previous paragraph 1 must all exist simultaneously.

PART II DEMATERIALIZATION AND SUBSTITUTE CONSERVATION

Article 4 - Generation of the cheque image

1. The NEGOTIATOR generates the CHEQUE IMAGE ensuring, by means of applying their digital signature, the conformity of the image to the original paper document.
2. The digital signature must be attributable to the NEGOTIATOR and must be applied by a subject who, for this activity, can commit the NEGOTIATOR.
3. The process of generating the CHEQUE IMAGE:

• ensures that the paper instrument is used only once to generate a single image having value for the purposes of this regulation;
• also guarantees the conformity of the CHEQUE IMAGE to the original paper document.

Article 5 - Conservation of the cheque image

1. The CHEQUE IMAGE is conserved by the NEGOTIATOR for the terms provided by applicable legislation.
2. The conservation is carried out by using technical and organizational rules such as to guarantee accessibility and usability of the CHEQUE IMAGE throughout the conservation period.

Article 6 - Registration on IT support

1. The NEGOTIATOR registers on IT support, with methods suitable to guarantee non-modifiability, full traceability, and legibility, all events characterizing the life of the CHEQUE, also in the case of corporate events (mergers, demergers, and incorporations), as well as the data referred to in Article 9 of this Regulation.
2. The DRAWEE or the ISSUER registers on IT support, with methods suitable to guarantee non-modifiability, full traceability, and legibility, the events referred to in Article 8, paragraph 4, and Articles 12 and 13 of this Regulation.

Article 7 - Conservation and availability of paper instruments

1. The paper CHEQUE is conserved by the NEGOTIATOR, or by a third Sammarinese subject in compliance with what is provided for in the subsequent Article 17, for 6 months from the expiry of the presentation period. During this period, the paper instrument is exhibited only upon request by the Judicial Authority. Any other request for exhibition or copy is fulfilled based on the CHEQUE IMAGE.
2. After the conservation period referred to in the previous paragraph has elapsed, the paper CHEQUE may be destroyed, save for the case where requests for seizure or orders for exhibition by the Judicial Authority are pending on the instrument, or the signature of the CHEQUE has been disavowed, or the NEGOTIATOR has evidence of other defense needs.

PART III PRESENTATION FOR PAYMENT

Article 8 - Electronic presentation for payment of the cheque

1. The electronic presentation for payment of the CHEQUE by the NEGOTIATOR takes place with the telematic transmission to the foreign drawee or issuer: a) of the CHEQUE IMAGE together with the data referred to in Article 9 of this Regulation for instruments with an amount exceeding 8,000.00 euros; b) of only the data referred to in the subsequent Article 9 for instruments with an amount equal to or lower than that referred to in the previous point a).
2. In the cases referred to in letter b) of the previous paragraph, the NEGOTIATOR transmits the CHEQUE IMAGE upon specific request by the foreign drawee or issuer.
3. INTERMEDIARIES, with prior agreement with the foreign intermediary, may provide for cases where, due to issues related to the physical nature of the instrument, the image is transmitted, together with the data referred to in the cited Article 9, also for the instruments referred to in paragraph 1, letter b) of this Article.
4. The electronic presentation for payment is considered effected when the DRAWEE or the ISSUER, also foreign, receive what is provided for under paragraph 1 of this Article.
5. INTERMEDIARIES adopt every necessary organizational and procedural safeguard to guarantee that the instrument is presented for payment only once.

Article 9 - Data to be transmitted

1. The NEGOTIATOR transmits telematically to the drawee or foreign issuer at least the following data relating to the negotiated CHEQUE: a) identifier of the NEGOTIATOR (ABI and CAB code); b) identifier of the drawee or foreign issuer (ABI and CAB code); c) amount; d) date of issuance; e) identification number of the CHEQUE; f) the name of the beneficiary for CHEQUES only for which the legislation of the payment system where the CHEQUE was drawn or issued provides for the indication of the name.

Article 10 - Timeframes

1. The NEGOTIATOR presents for payment in electronic form to the drawee or foreign issuer the CHEQUE no later than the next business day after the day on which the instrument was endorsed to them for collection.
2. In the case where the CHEQUE is endorsed for collection through systems alternative to counter delivery, the term referred to in the previous paragraph runs from the day on which the instrument arrives at the NEGOTIATOR. INTERMEDIARIES inform their clients of the maximum timeframes within which the CHEQUE endorsed for collection, with the aforementioned methods, arrives at the NEGOTIATOR.
3. The request for transmission of the CHEQUE IMAGE referred to in Article 8, paragraph 2 of this Regulation must reach the NEGOTIATOR in time to allow the sending of the image no later than the next business day after the presentation.
4. The possibility remains, where the legal prerequisites exist, to avail oneself of the provisions regarding the extension of legal and conventional terms.

Article 11 - Unpaid cheques

1. The communication of non-payment is transmitted telematically by the DRAWEE or ISSUER to the foreign negotiator.

PART IV NON-PAYMENT AND PROTEST

Article 12 - Transmission of data for the purpose of protest issuance

1. In the event of non-payment of a CHEQUE presented for payment in electronic form, the DRAWEE or ISSUER transmits telematically to the authorized public official the information with which they request the issuance of the protest, signed with a digital signature, together with the CHEQUE IMAGE generated pursuant to Article 4.
2. INTERMEDIARIES and public officials, in agreement with each other, may establish that the documentation referred to in paragraph 1 is not signed with a digital signature provided it is nonetheless certainly attributable to the DRAWEE or ISSUER, without possibility of repudiation.
3. INTERMEDIARIES adopt every necessary organizational and procedural safeguard to guarantee that the documentation referred to in paragraph 1 can be transmitted only once with reference to each CHEQUE. This is without prejudice to the case where the INTERMEDIARY has received telematically from the public official a document attesting to the non-protestability of the CHEQUE.

Article 13 - Protest issuance

1. In the cases referred to in the previous Article 12, the protest is issued telematically by the public official authorized for this purpose, exclusively based on the CHEQUE IMAGE and the information sent by the DRAWEE or ISSUER.
2. The protest may be attached to the CHEQUE IMAGE and must be signed with a digital signature by the public official.
3. If the CHEQUE is found to be non-protestable, the public official generates and signs with a digital signature a document attesting to its non-protestability.
4. The DRAWEE or ISSUER acquires telematically from the public official the protest or the document attesting to the non-protestability of the instrument and sends it, always telematically, to the foreign negotiator no later than the fourth business day following the acquisition.
5. The NEGOTIATOR conserves the protest or the document attesting to the non-protestability of the CHEQUE.

PART V DELIVERY OF DOCUMENTATION AND COMMUNICATIONS TO AUTHORITIES

Article 14 - Delivery of documentation

1. The NEGOTIATOR releases to the holder of the CHEQUE only once: a) an analogical copy of the CHEQUE IMAGE with the information relating to non-payment registered pursuant to Article 6, paragraph 1 of this Regulation, on which is applied a declaration by the NEGOTIATOR attesting to its conformity with the original IT document conserved in their archives; b) an analogical copy of the protest or the document attesting to the non-protestability of the CHEQUE, on which is applied a declaration by the NEGOTIATOR attesting to its conformity with the original IT document conserved in their archives.
2. Upon request by those entitled, the NEGOTIATOR releases simple copies, analogical or IT, of only the CHEQUE IMAGE, the CHEQUE IMAGE with the information relating to non-payment registered pursuant to Article 6, paragraph 1 of this Regulation, the protest or the document attesting to the non-protestability of the CHEQUE.

Article 15 - Communications to authorities

1. The methods of communication to authorities as well as to public officials, resulting from other legal or regulatory provisions concerning CHEQUES and the activities referred to in this Regulation, remain unchanged.

PART VI TECHNICAL-IT REQUIREMENTS AND OUTSOURCING

Article 16 - Technical-IT requirements

1. INTERMEDIARIES wishing to exercise the option provided for in Article 4 of LD No. 123/2017 for CHEQUES having the characteristics referred to in the previous Article 3, paragraph 1, in order to: a) generate the CHEQUE IMAGE; b) present the CHEQUE for payment in electronic form; c) communicate the non-payment of the CHEQUE; d) transmit data for the protest issuance telematically; e) conserve the CHEQUE IMAGE; f) conserve the protest or the document attesting to the non-protestability of the CHEQUE; g) register on IT support events relating to the CHEQUE; h) use digital signatures; i) comply with procedures provided for in the case where it is not possible to generate the CHEQUE IMAGE that ensures conformity with the original paper document; must use specific technical solutions and methods suitable to guarantee full correspondence of the minimum regulatory and technical-IT requirements provided for by the legislation of the foreign intermediary with which the INTERMEDIARY intends to relate for the management in dematerialized mode of the payment of the CHEQUE.
2. Public officials, for aspects of specific competence relating to the management of the protest, use the solutions and technical methods referred to in the previous paragraph.

Article 17 - Third parties

1. To the extent compatible and in compliance with current legislation on outsourcing, INTERMEDIARIES may delegate to third parties, Sammarinese and non-Sammarinese, all activities referred to in the previous Article 16 and generally those useful to allow them to comply with the obligations required under this legislation.
2. INTERMEDIARIES are responsible for outsourced activities and monitor risks arising from outsourcing by exercising, among other things, control activities. They document and approve, at an organizational level adequate and coherent with the overall corporate policy, any delegation to third parties of the activities referred to in the previous paragraph.

PART VII SANCTIONS

Article 18 - Administrative sanctions

1. Violations of the provisions contained in this Regulation are punished by the SANCTIONS DECREE under Article 18.

PART VIII ENTRY INTO FORCE

Article 19 - Entry into force

1. This Regulation enters into force on 29 January 2018.