Resolution 131/2009 Approving the New Regulation of the High-Value Payments System (SIPAV)

RESOLUCIÓN DE DIRECTORIO Nº 131/ 2009
SUBJECT: FINANCIAL ENTITIES MANAGEMENT – APPROVES THE NEW REGULATION OF THE HIGH-VALUE PAYMENTS SYSTEM. (SIPAV)

HAVING VIEWED:
Law No. 1670 of October 31, 1995 of the Central Bank of Bolivia (BCB).
The Statute of the BCB approved by Board Resolution No. 128/2005 of October 21, 2005 and its subsequent modifications.
The Regulation of the High-Value Payments System (SIPAV) approved by Board Resolution No. 166/2004 of November 9, 2004, subsequently modified by Board Resolution No. 109/2007 of August 21, 2007.
The Report of the Financial Entities Management GEF-SANA No. 581/2009 of October 16, 2009.
The Report of the Legal Affairs Management SANO No. 324/2009 of October 20, 2009.

CONSIDERING:
That pursuant to Articles 1, 2 and 3 of Law No. 1670, it is the objective of the BCB to ensure the stability of the internal purchasing power of the national currency, for which compliance and within the framework of its administrative, technical, financial and specialized regulatory competence, it formulates policies of general application in monetary, exchange and payments system matters.

That pursuant to Articles 30 and 37 of said Law, financial intermediation and financial services entities, whose operation is authorized by the

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Superintendence of Banks and Financial Entities, currently named the Financial System Supervision Authority (ASFI); are subject to the regulatory competence of the BCB regarding the administration of the payments system.

That likewise Law No. 1670 in its Article 54 item b) provides that it is an attribution of the BCB Board to regulate the administration of payments systems among authorized financial entities.

That the Financial Entities Management, through Report GEF-SANA No. 581/2009 of October 16, 2009, recommends approving the New Regulation of the High-Value Payments System (SIPAV) with the purpose of reducing risks, improving the services provided by the BCB and consolidating the established operational processes.

That the Legal Affairs Management, through Report SANO No. 324/2009, states that the draft of the New SIPAV Regulation presented by the Financial Entities Management is legally appropriate, insofar as it does not contravene the current legal framework, being the competence of the BCB Board to consider its approval.

That the BCB Board, in its capacity as the highest authority of the Institution, is responsible for defining its policies, specialized regulations of general application and internal rules, being empowered to issue norms and adopt general decisions that may be necessary for the fulfillment of the functions, competencies and powers assigned by Law to the Issuing Entity, as established in Articles 44 and 54 item o) of Law No. 1670 and Articles 9, 11 and 24 of the BCB Statute.

THEREFORE,
THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA RESOLVES:

Article 1.- Approve the New Regulation of the High-Value Payments System (SIPAV) in its VIII chapters and 54 articles, which, as an annex, forms an integral part of this Resolution.

Article 2.- This Regulation shall enter into force as of November 24, 2009.

Article 3.- Repeal Board Resolutions No. 166/2004 of November 9, 2004 and No. 109/2007 of August 21, 2007 as of November 24, 2009.

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Article 4.- The Presidency and General Management are charged with the execution and compliance of this Resolution.

La Paz, October 27, 2009

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Gabriel Loza Tellería

_________________________ _________________________ Gustavo Blacutt Alcalá Hugo Dorado Araníbar _________________________ _________________________ Rolando Marín Ibáñez Ernesto Yáñez Aguilar _________________________ Rafael Boyán Téllez

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ANNEX
NEW REGULATION OF THE HIGH-VALUE PAYMENTS SYSTEM (SIPAV)

CHAPTER I
PRELIMINARY PROVISIONS

Article 1.- (Object) The object of this Regulation is to regulate the operation and operability of the High-Value Payments System (SIPAV) and to establish the rights, obligations and responsibilities of its administrator, its participants and its query users.

Article 2.- (Scope of application) The norms contained in this Regulation shall apply to the Central Bank of Bolivia (BCB), to the participants and query users of the SIPAV.

Article 3.- (Definitions) For the purposes of interpretation of this Regulation, the following definitions are established:

a) Administrator. Entity that manages the compensation and settlement processes of payment operations and provides payment services. These services may include the provision of settlement accounts to participants, system hardware, software, operational procedures or the communications network.

b) Digital certificate. Electronic document that links a public key with the signer, whose purpose is to certify its identity.

c) Collateral. Assets that the participant maintains at the BCB, whose purpose is to guarantee the credits granted within the SIPAV operation.

d) Intraday credit. Credit granted for a period of less than one business day.

e) Overnight credit. Credit with a maturity of one working day for the following day.

f) BCB Debits. Debit operations carried out by the BCB in the accounts of financial entities participating in the SIPAV.

g) Electronic document. Data message created, sent, communicated, received and stored by electronic means transmitted through the SIPAV. Electronic is understood as the use of technology that has electrical, digital, magnetic, wireless, optical, electromagnetic or other similar properties.

h) Certification entity. Entity that issues digital certificates and provides services related to digital certification.

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i) Settlement entity. Financial intermediation entity that maintains a current and/or reserve account at the BCB and is accepted by it to assume the responsibility of providing the necessary funds for the settlement of the net multilateral positions of participants of an Electronic Compensation Chamber (CEC) or Compensation and Settlement Services Entity (ESCL) that do not have settlement accounts at the BCB. The settlement entity may in turn act as a participant of the SIPAV, a CEC or an ESCL.

j) Due. Characteristic of electronic documents whereby, at the moment of their acceptance in a payments system, they are susceptible to settlement and execution.

k) Digital signature. String of characters generated by an asymmetric cryptographic method that is attached or associated with a document to ensure its authenticity, integrity and non-repudiation.

l) Operational and IT Guide. Document approved by the General Management of the BCB that describes the processes and procedures of SIPAV operations, its schedules, the use of electronic communication forms and the generation of digital certificates, as well as the digital signature, determination of the structure of electronic documents, encoders for operations and contingency procedures.

m) Irrevocable or definitive. Characteristic of electronic documents whereby, at the moment of their acceptance in a payments system, they cannot be denied, rejected, reversed or annulled by who generated them or by who received them.

n) Real-Time Gross Settlement (RTGS). Continuous (real-time) settlement of electronic fund transfer or securities payment orders individually, that is, one by one, without netting.

o) Electronic communication message. Electronic document under a specific format, whose object is the exchange of information between the BCB and the SIPAV participants.

p) Payment order. Electronic document by which fund transfers between participant accounts, to accounts of other entities at the BCB or between accounts of the same participant are instructed.

q) Participant. Entity authorized by the BCB to issue (originating participant) or receive (receiving participant) electronic documents on its own behalf or on behalf of third parties in the SIPAV.

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r) SIPAV. Electronic RTGS system that allows participants to send and receive electronic documents.

s) Fund transfer. Movement of funds generated by a payment order.

t) Query user. Entity enabled in the SIPAV authorized by the BCB that accesses through it the electronic balance inquiry services in the Balances and Statements Module (SISE).

u) Valid. Characteristic whereby all electronic documents accepted by a payments system produce full legal effects between who issued them and who received them.

CHAPTER II
ADMINISTRATION OF THE SIPAV

Article 4.- (Administrator) The BCB, within the framework of its attributions and functions established in its Law No. 1670 of October 31, 1995, is the Administrator of the SIPAV.

Article 5.- (Obligations) The Administrator of the SIPAV has the following obligations:

a) Ensure the availability and operability of the SIPAV during its operating hours.

b) Process the electronic documents received through the SIPAV.

c) Apply computer security procedures that allow minimizing risks in the process of electronic documents through the SIPAV.

d) Draft and keep the Operational and IT Guide updated.

e) Make available to each participant the online information on the status and movement of their accounts.

f) Preserve the electronic documents of the operations with their corresponding digital signature, for a period of no less than ten (10) years after the document is processed.

g) Establish internal control procedures.

h) Establish and apply contingency procedures.

Article 6.- (Contingency Authorization) The Payments System Department of the Financial Entities Management (GEF), as the administrative area of the SIPAV, will authorize or reject the declaration of contingency of the participant or the BCB. The

//7. R.D. No. 131/2009 contingency procedures will be established in the Operational and IT Guide that forms part of the SIPAV Participation Contract.

Article 7.- (Schedules) The service provision and operation processing schedules will be established in the Operational and IT Guide. Any modification of the schedules will be timely communicated to the participants by the General Management of the BCB through circular. The official time will be the time registered by the BCB as administrator of the SIPAV.

Article 8.- (Tariffs) The tariffs for SIPAV services will form part of the "Table of commissions for BCB services". This charge will be debited monthly from the participants' accounts.

Article 9.- (Fines) Fund transfers and debits that the BCB carries out on behalf of participants outside the schedules defined in the Operational and IT Guide will be subject to the collection of fines according to what is indicated in the "BCB Fine Table".
In the event that the Payments System Department of the GEF authorizes the declaration of contingency, the operation processed outside of hours associated with this procedure will be exempt from the collection of the fine.

Article 10.- (Certification of digital signatures) The Administrator and the SIPAV participants will contractually define the modality of certification of digital signatures within the framework of what is established in the Digital Signature Regulation for the Payments System.

Article 11.- (Limitation of liability) The BCB will not be responsible for the legality of the origin or the final destination of the resources processed to make payments through the SIPAV.

CHAPTER III
SIPAV PARTICIPANTS

Article 12.- (Authorized entities) In addition to the BCB, the following may be participants in the SIPAV: financial intermediation entities supervised by the Financial System Supervision Authority, CEC, ESCL and others expressly authorized by the BCB Board.

Article 13.- (Direct and indirect participants) By their nature, participants are direct when they have a current and/or reserve account at the BCB or indirect when they effect the settlement of their operations through a Settlement Entity according to what is defined by the CEC and Compensation and Settlement Services Regulation.

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Article 14.- (Requirements to be enabled as a SIPAV participant) Any authorized entity, to be enabled as a SIPAV participant, must request its enablement to the General Management of the BCB through a written note accompanied by the documentation that demonstrates compliance with the requirements established in the Operational and IT Guide.

Article 15.- (Start of operations) Once the provisions of the preceding article are met, the participant must adhere to the SIPAV participation contract. The BCB will communicate to the participant the date from which it may start operations in the SIPAV.

Article 16.- (Obligations) The obligations of the SIPAV participants are the following:

a) Comply with the provisions contained in this Regulation.

b) Know and apply the Operational and IT Guide.

c) Comply with payment obligations contracted with the BCB within the deadlines and schedules established for this purpose.

d) Timely accredit with the BCB the additions and removals of officials authorized to access SIPAV information.

e) Timely submit to the BCB the information it requires regarding the payments system.

f) Preserve the electronic records of the operations with their corresponding digital signature for a period of no less than ten (10) years, after the electronic document is processed.

g) Immediately inform the Payments System Department of the GEF of any failure or vulnerability detected in the system.

h) Request from the Payments System Department of the GEF the authorization for declaration of contingency complying with the procedures established in the Operational and IT Guide.

i) Comply with the minimum computer security requirements established by the corresponding supervision entities.

j) Sign the SIPAV participation contract and have it notarized.

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Article 17.- (Liability for economic losses) SIPAV participants will be responsible for economic losses caused by non-compliance with the norms contained in the SIPAV Regulations, Digital Signature Regulation, Operational and IT Guide and any other related regulation.

Article 18.- (Liability for operations) Participants will assume total responsibility for their operations and will employ mechanisms that guarantee their efficiency and security. The SIPAV Administrator will not be responsible for errors, omissions, internal technical failures or other of a different nature in the processing of payment orders. Likewise, the responsibility for connections that the participant makes to its own and third-party systems, equipment or networks remains at its own risk.

Article 19.- (Dispute resolution) Disputes arising between the BCB and a SIPAV participant will be resolved by the instance determined contractually.

Article 20.- (Grounds for suspension) A SIPAV participant will be subject to suspension when:

a) It makes improper use of the system, understood as any act that contravenes what is provided in this Regulation and in the SIPAV participation contracts, settlement account opening and credit line opening.

b) It carries out or attempts to carry out unauthorized operations. Unauthorized operations are considered those carried out by documentary means when the operation is enabled for its realization in the SIPAV and those reserved for contingency procedures: cash credits of direct or indirect participants and documentary instructions of indirect participants, when these have not been authorized by the System Administrator.

c) It exposes other participants or the BCB to unnecessary risks by not observing the processes and procedures contained in this Regulation, the Digital Signature Regulation, the CEC and SCL Regulation, the Operational and IT Guide and others defined contractually.

d) It fails to comply with the computer security requirements established by the respective supervision entities or by the BCB.

e) It is subject to intervention ordered by the Financial System Supervision Authority, according to Chapter III of Title Nine of Law No. 1488 of Banks and Financial Entities, without prejudice to operations accepted in entities recognized by the BCB as CEC or ESCL.

f) It fails to pay overnight credits more than twice.

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Article 21.- (Suspension of participants due to administrative resolutions)
I. When the SIPAV Administrator receives communication of administrative resolutions that have the effect of prohibiting, suspending or limiting in any way any participant from carrying out payment operations, it will suspend the participant against whom the administrative resolution was issued and will communicate the suspension carried out to the corresponding supervision and control entities and to all participants.
II. The lifting of the suspension of a participant will proceed once the instance that issued the resolution notifies the BCB of this fact.

Article 22.- (Modalities of suspension) The suspension of participation or operations of a participant according to the grounds for suspension and its impact on the system may imply any of the following modalities:

a) In the event that the participant makes improper use of the system, carries out or attempts to carry out unauthorized operations, it will be subject to the suspension of one or more types of operations.

b) In the event that the participant exposes other participants, the BCB to unnecessary risks or fails to comply with computer security requirements, it will be subject to the suspension of its valid digital certificate(s) without prejudice to the operations that other participants may credit through electronic operations to the account of the suspended participant.

c) In the event that the participant is subject to intervention ordered by the Financial System Supervision Authority, according to Chapter III of Title Nine of Law No. 1488, it will be suspended in its capacity as a SIPAV participant, with which it will be unable to generate or receive electronic documents. The BCB will communicate to all participants the effective date, modality and term of the suspension of a participant. Once the suspension term is fulfilled, the BCB will communicate to the participants the restart of operations of the suspended participant in the SIPAV.

Article 23.- (Effects of suspension) The suspension of participants has the following effects:

a) No new payment orders from the suspended participant will be accepted.

b) Payment orders accepted before the communication of the suspension must be settled.

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Article 24.- (Suspension) The General Management of the BCB, prior to a report from the GEF, may temporarily or definitively suspend the participation or carrying out of operations of a participant.

CHAPTER IV
SIPAV QUERY USERS

Article 25.- (Query users) Entities that maintain accounts at the BCB and are not participants in the SIPAV may request through a written note to the GEF their enablement as entities using SIPAV query services.

Article 26.- (Requirements for enablement of query users) Any authorized entity, to be enabled as a SIPAV query user, must comply with the requirements established for enablement of query users defined in the Operational and IT Guide. The GEF will issue a conformity report and authorize its incorporation into the SIPAV as a query user.

Article 27.- (Obligations) The obligations of the SIPAV query users are the following:

a) Comply with the provisions contained in this Regulation.

b) Know the Operational and IT Guide.

c) Timely accredit with the GEF of the BCB the additions and removals of officials authorized to access SIPAV information.

d) Immediately inform the Payments System Department of the GEF of any failure or vulnerability detected in the system.

e) Comply with the minimum computer security requirements established by the corresponding supervision entities.

CHAPTER V
OPERATIONS

Article 28.- (Debit accounts in the SIPAV) SIPAV participants may only effect fund transfers from their own accounts. These accounts will be detailed in the Operational and IT Guide.

Article 29.- (Credit accounts in the SIPAV) All valid accounts of the financial system and the General Treasury of the Nation may receive credits from SIPAV participants.

Article 30.- (BCB Debits) The BCB will debit the accounts of participants in the SIPAV for the following concepts:

a) For due obligations of participants with the BCB. These debits will be carried out according to the schedules established in the Operational and IT Guide.

b) For operations expressly authorized by the participants, which will be detailed in the respective contracts and in the Operational and IT Guide.

Article 31.- (Currencies of operations) Payment orders may be carried out in the following currencies:

a) Bolivianos.

b) United States Dollars.

Article 32.- (Monetary denominations of operations)
I. Payment orders will be registered in the following monetary denominations:

a) National currency (NC).

b) Foreign currency (FC) only United States Dollars.

c) National currency with value maintenance in relation to the Housing Development Unit (NC-HDU).

d) National currency with value maintenance in relation to the United States Dollar (NC-USD).

II. The participant may not carry out fund transfers from its account denominated in NC, NC-HDU or NC-USD to its account or accounts of other participants denominated in foreign currency.

III. The authorized monetary denominations for each type of operation will appear in the Operational and IT Guide.

Article 33.- (Types of electronic documents). The following electronic documents may be transmitted through the SIPAV:

1. Payment orders.

2. Electronic communication messages.

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Article 34.- (Acceptance of Electronic Documents) An electronic document is considered accepted when it has passed all validations required by the SIPAV and therefore can be processed or settled under its rules and procedures.

Article 35.- (Response Message). The electronic documents received in the SIPAV will generate an automatic response message to the originating participant with the digital signature of the BCB. Through this message, the Administrator informs the acceptance or rejection of an electronic document.

Article 36.- (Use of Digital Signature). The electronic documents sent through the SIPAV will include the digital signature as a mechanism to ensure their authenticity, integrity, and non-repudiation.

Article 37.- (Probative Value and Legal Effects). The records of the electronic documents processed through the SIPAV, which are maintained by the BCB, will have full probative value and the same legal effects as written files and records.

Article 38.- (Completion of the Operation). Once the funds are credited to the recipient's account, the operation will be considered definitive and concluded from an operational and legal point of view.

Article 39.- (Validity and Irrevocability of Electronic Documents and Their Settlement) Accepted electronic documents and their processing and settlement are irrevocable or definitive, valid, and enforceable. No rule or practice may challenge, annul, or reverse them.

CHAPTER VI
INTRADAY CREDIT

Article 40.- (Object). The object of intraday credit is to provide immediate liquidity to participants to facilitate the flow of payments in the SIPAV.

Article 41.- (Characteristics of Intraday Credit). Intraday credit will be granted:
a) When the participant does not have sufficient funds in their current and reserve account or in their reserve account to send a payment order. b) In local currency (MN) or foreign currency (ME), depending on the payment order. c) To SIPAV participants who have the required collateral. d) Intraday credit will be disbursed at no cost to the participant.

//14. R.D. N° 131/2009 e) Intraday credit will not be granted for transfers of funds between own accounts, debits made by the BCB, nor for the settlement of CEC or ESCL operations.

Article 42.- (Collateral).
a) The collateral for intraday credit will consist of the first tranche of the Participant's Liquidity Asset Requirement Fund (Fondo RAL), up to the limit determined by the Financial System Analysis Committee prior to the report of the GEF. b) The collateral will be constituted in local currency (MN) or foreign currency (ME), depending on the credit requested. To determine the maximum amount of intraday credit, the interest corresponding to a possible overnight credit will be deducted from the value of the collateral. c) The constituted collateral will not be subject to any type of judicial attachment or retention. d) The processes of constitution, increase, substitution, and execution of collateral in the SIPAV will be definitive or irrevocable, valid, and enforceable. No rule or practice may challenge, annul, or reverse them.

Article 43.- (Rejection). An intraday credit will be rejected for the following reasons:
a) When the requested amount exceeds the constituted collateral according to what is established by the preceding Article of this Regulation. b) When the participant maintains an outstanding overnight credit to be paid.

Article 44.- (Disbursement) The disbursement of intraday credit will be carried out automatically in local currency (MN) or foreign currency (ME) as appropriate, for the difference between the amount of the requested payment order and the balance of the current and reserve account or the reserve account to be debited. The disbursement will be credited to the participant's current and reserve account or reserve account, as appropriate.

Article 45.- (Payment of Intraday Credit) The intraday credit must be paid on the same day it was granted, within the operating hours of the SIPAV established in the Operational and IT Guide.

The intraday credit not paid within the established period will result in an automatic debit in the participant's account. If there are insufficient funds, an overnight credit will be disbursed for the uncovered balance.

Article 46.- (Execution of Collateral)

//15. R.D. N° 131/2009 a) In the event that a participant is subject to intervention ordered by the Supervisory Authority of the Financial System, in accordance with Chapter III of Title Nine of Law N° 1488 and has an active intraday credit on the day of communication to the BCB, the procedure for automatic debit to the participant's account at the end of the day will be followed. If there are insufficient funds in the account, the existing amount will be debited and, in case of insufficient balances, the BCB will liquidate the collateral. b) The procedures for the execution of the collateral committed in the disbursement of intraday credit, for the purpose of completing the settlement of the intraday credit, will be carried out without being limited, suspended, or revoked by judicial or administrative order of any nature.

CHAPTER VII
OVERNIGHT CREDIT

Article 47.- (Object) Overnight credit has the sole and exclusive object of paying overdue intraday credits.

Article 48.- (Characteristic of Overnight Credit) It will be granted automatically in local currency (MN) or foreign currency (ME) according to the overdue intraday credit.

Article 49.- (Interest Rate) It will be equal to the interest rate of liquidity credits granted with guarantee of the second tranche of the RAL Fund plus three hundred (300) basis points.

Article 50.- (Collateral) The collateral for overnight credit will be constituted by the same collateral as the overdue intraday credit.

Article 51.- (Disbursement) The disbursement of overnight credit will be carried out by crediting the participant's current and reserve account or reserve account once the payment schedule for the intraday credit has concluded. This account will be simultaneously debited by the BCB for the payment of the overdue intraday credit.

Article 52.- (Payment)
I. The overnight credit must be paid by 10:00 a.m. on the next business day after its disbursement. If weekends or holidays intervene between the disbursement date and the first business day, the interest rate will apply to all calendar days.

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II. If the participant does not pay the overnight credit within the established period, the BCB will debit the overdue amount owed from their current and reserve account or reserve account. In case of insufficient balances, the BCB will liquidate the collateral.

CHAPTER VIII
INFORMATION SECURITY AND CONTINGENCY GUIDELINES

Article 53.- (Information Security) The information security guidelines for the SIPAV operation processing system will be established by the BCB in the Operational and IT Guide.

Article 54.- (Contingency System) To allow operational continuity in the SIPAV, alternative mechanisms and processes for processing operations in contingency will be established in the Operational and IT Guide. Participants must have the necessary equipment in accordance with the requirements determined in the Operational and IT Guide.

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