Resolution of the Board of the National Bank of the Kyrgyz Republic No. 2020-P-14/64-1-(PS) of November 4, 2020, on Amendments to Certain Regulatory Legal Acts Regarding the Registration of International Payment Systems

Resolution of the Board of the National Bank of the Kyrgyz Republic dated November 4, 2020 No. 2020-P-14/64-1-(PS) On Amendments to Certain Regulatory Legal Acts of the National Bank of the Kyrgyz Republic Regarding the Registration of International Payment Systems In accordance with Articles 20 and 68 of the Law of the Kyrgyz Republic "On the National Bank of the Kyrgyz Republic, Banks and Banking Activity", the Board of the National Bank of the Kyrgyz Republic resolves:

1. To amend the following resolutions of the Board of the National Bank of the Kyrgyz Republic (attached):

• "On Approval of the Rules for Money Transfers via Money Transfer Systems in the Kyrgyz Republic" dated July 15, 2009 No. 30/6;

• "On Approval of the Regulation 'On Bank Payment Cards in the Kyrgyz Republic'" dated December 9, 2015 No. 76/8.

2. This resolution shall enter into force after fifteen days from the date of its official publication.

3. Legal Department:

• to publish this resolution on the official website of the National Bank of the Kyrgyz Republic;

• after official publication, to send this resolution to the Ministry of Justice of the Kyrgyz Republic for inclusion in the State Register of Regulatory Legal Acts of the Kyrgyz Republic.

4. Payment Systems Department to bring this resolution to the attention of commercial banks, CJSC "Interbank Processing Center", ALE "Union of Banks of Kyrgyzstan", operators of international payment systems for settlements using bank payment cards, and operators of money transfer systems registered with the National Bank of the Kyrgyz Republic.

5. State Language Development and Document Management Department to bring this resolution to the attention of relevant structural divisions, regional departments, and the representative office of the National Bank of the Kyrgyz Republic in Batken region.

6. Control over the execution of this resolution shall be entrusted to the member of the Board of the National Bank of the Kyrgyz Republic supervising the Payment Systems Department.

Chairman T. Abdygulov

Appendix to the Resolution of the Board of the National Bank of the Kyrgyz Republic dated November 4, 2020 No. 2020-P-14/64-1-(PS)

Amendments to Certain Regulatory Legal Acts of the National Bank of the Kyrgyz Republic Regarding the Registration of International Payment Systems

1. To introduce the following amendments to the Resolution of the Board of the National Bank of the Kyrgyz Republic "On Approval of the Rules for Money Transfers via Money Transfer Systems in the Kyrgyz Republic" dated July 15, 2009 No. 30/6:

in the Rules for Money Transfers via Money Transfer Systems in the Kyrgyz Republic, approved by the aforementioned resolution:

• point 3.1 shall be reworded as follows:

"3.1. An operator (resident or non-resident of the Kyrgyz Republic) must register with the National Bank to provide money transfer services in the territory of the Kyrgyz Republic.

The activity of money transfer system operators in the territory of the Kyrgyz Republic without registration with the National Bank is prohibited.";

• after point 3.1, the Rules shall be supplemented with points 3.1-1, 3.1-2, 3.1-3, 3.1-4, 3.1-5, and 3.1-6 as follows:

"3.1-1. To undergo registration, the operator shall submit the following original documents or duly certified copies thereof to the National Bank:

1) an application for registration to provide money transfer services, indicating the following information:

• name of the money transfer system;

• name of the money transfer system operator and country of origin;

• information on the legal and actual addresses of the operator;

• name of the operator's settlement bank, if the operator is not a credit institution;

2) a copy of the certificate and/or other equivalent document of state/accounting registration of the legal entity, confirming its legal status and country of origin;

3) a certificate of tax registration in the country of origin;

4) a copy of the money transfer system operator's registration certificate, license/certificate, and other documents (if applicable) confirming the right to carry out money transfers, issued by the authorized financial supervisory body of the country of origin that licenses/regulates the specified activity, or a written confirmation from this body/legal company that such permission/confirmation is not required by the legislation of the country of origin (it is not a licensed/regulated type of activity);

5) system rules approved by the authorized body of money transfer systems;

6) a standard agreement with system participants, if any.

If the money transfer system belongs to a bank, a duly certified copy of the license for banking operations issued by the central (national) bank of the country of origin shall be additionally submitted to the National Bank.

3.1-2. Official documents of foreign states submitted for registration by a non-resident money transfer system operator must be legalized in the prescribed manner, unless otherwise provided by international treaties in force to which the Kyrgyz Republic is a party.

Documents in a foreign language must contain a duly certified translation into the state and/or official languages of the Kyrgyz Republic.

Documents containing more than one sheet must be numbered page by page, stitched, signed, and duly certified.

Upon request of the National Bank, documents must be submitted in electronic form.

Documents submitted to the National Bank by money transfer system operators are not returned.

3.1-3. Within a period not exceeding 15 (fifteen) calendar days from the date of receipt by the National Bank of the operator's application for registration and documents for registration, the National Bank shall make a decision on the registration of the said money transfer system operator or on refusal of registration. The National Bank shall notify the operator in writing of the decision taken within 3 (three) working days from the date of the decision.

The time spent by the operator on refining documents is not included in the document review period. If the submitted documents do not meet the requirements of the National Bank, the document review period begins from the date the National Bank receives documents that meet the stated requirements.

The final decision on the results of reviewing documents for registration is made after the National Bank receives copies of the application and other documents in paper form, unless otherwise provided by the regulatory legal acts of the National Bank.

Upon making a positive decision on registration, the National Bank assigns a registration number to the money transfer system operator, includes information about it in the register of operators providing money transfer services in the territory of the Kyrgyz Republic (hereinafter – the register of money transfer system operators), and within the established period sends the operator a written notification of registration with the assigned registration number.

The procedure for maintaining the register of money transfer system operators is established by the National Bank.

3.1-4. In case of non-compliance of the registration documents with the established requirements and/or submission of an incomplete package of documents, they shall be returned for refinement.

Additional/refined documents, taking into account comments, must be submitted to the National Bank within no more than 10 (ten) working days from the date the operator receives the documents for refinement. These documents may be submitted in electronic form in advance, with mandatory subsequent submission of paper copies.

If documents that do not comply with the requirements of these Rules or are incomplete are submitted more than twice, the National Bank has the right to refuse registration to the money transfer system operator, by sending a corresponding written notification within the established period, indicating the reasons for refusal.

3.1-5. The money transfer system operator is obliged to notify the National Bank in writing of any changes to the information specified during its registration, within 3 (three) working days from the moment the changes occur.

Based on the information provided, if necessary, the National Bank shall make a corresponding entry in the register of money transfer system operators within 3 (three) working days.

3.1-6. At the stage of implementing new services/products/offerings (improvements) of the system in the territory of the Kyrgyz Republic, the money transfer system operator must first inform the National Bank and send a notification with detailed information describing the developed service/product/offering, proposed changes/additions to the system, and obtain permission from the National Bank for the use of new services/products/offerings (improvements) of the system in the territory of the Kyrgyz Republic.";

• point 3.2-1 shall be reworded as follows:

"3.2-1. The National Bank shall annul the registration of an international money transfer system operator and make a corresponding entry in the register of money transfer system operators in the following cases:

1) in case of revocation/annulment of the non-resident operator's permits, license/certificate/registration certificate for the right to operate money transfer systems, issued by the authorized financial supervisory body of the country of origin that licenses/regulates the specified activity;

2) in case the international money transfer system operator submits an application for its exclusion from the register of money transfer system operators in the National Bank or other written notification of its cessation of international money transfer system operations in the territory of the Kyrgyz Republic. The international money transfer system operator shall submit the application only after final settlement with payment system participants.

The National Bank shall notify the international money transfer system operator, commercial banks of the Kyrgyz Republic, and other interested parties in writing of the annulment of registration, and shall also post information about the annulment of registration on its official website.

An international money transfer system operator must cease providing money transfer services in the territory of the Kyrgyz Republic no later than the day of its exclusion by the National Bank from the relevant register and the posting of information about this on its official website.";

• the Rules shall be supplemented with point 3.8 as follows:

"3.8. When carrying out a money transfer without opening an account by crediting the money transfer to the bank account and/or bank payment card specified by the sender, the operator, other than the operator of local money transfer systems, must comply with the requirements of point 3.7 of these Rules.".

2. To introduce the following amendments to the Resolution of the Board of the National Bank of the Kyrgyz Republic "On Approval of the Regulation 'On Bank Payment Cards in the Kyrgyz Republic'" dated December 9, 2015 No. 76/8:

in the Regulation "On Bank Payment Cards in the Kyrgyz Republic", approved by the aforementioned resolution:

• in point 5:

the eighth paragraph shall be reworded as follows:

"ATM – a hardware and software complex for issuing and/or receiving cash, making payments using cards, and obtaining information on completed transactions. An ATM is banking equipment and is intended for the cardholder to independently perform operations using a card without the participation of an authorized employee of a commercial bank.";

the twenty-eighth paragraph shall be reworded as follows:

"POS (point-of-sale)-terminal – a hardware and software complex designed for performing operations for payment for goods and services using bank payment cards and other remote service instruments, including cash withdrawals from bank payment cards.";

in the forty-third paragraph, the words "goods or services" shall be replaced with the words "for its goods/services";

the fifty-third paragraph shall be reworded as follows:

"Virtual POS-terminal – a web interface replacing a physical POS-terminal and interacting with the bank's system to perform operations for payment for goods and services using bank payment cards and other remote service instruments. A Virtual POS-terminal can also be used to replenish settlement accounts of non-commercial organizations.";

• point 15-1 shall be reworded as follows:

"15-1. The limit for cash withdrawal from a bank card through a bank agent shall not exceed 150 (one hundred fifty) settlement indicators per day per device (POS-terminal) installed at the agent, per payment card.";

• the fourteenth paragraph of point 33 shall be reworded as follows:

"The Issuer has the right to allow cardholders to make payments without using a PIN code and to make contactless payments within the limits established in internal rules and procedures for cardholders, taking into account the criteria for assessing the degree (level) of client risks, according to the issuer's internal control program and payment system rules. In this case, the issuer bears responsibility for these transactions.";

• Chapter 9 shall be reworded as follows:

"Chapter 9. Requirements for International Payment Systems/Operators of International Payment Systems

59. The operator of a national or local payment system for settlements using bank payment cards must be a resident of the Kyrgyz Republic and have a license from the National Bank to carry out activities for providing services for receiving, processing, and issuing financial information (processing, clearing) for payments and settlements of third parties to payment system participants of the given processing, clearing center in accordance with the regulatory legal acts of the National Bank.

The procedure for obtaining a license (permission to carry out this activity, with an indication in the list of permitted banking operations) and the main requirements for banks are established in the regulatory legal acts of the National Bank on licensing banking activities, for other payment system operators – in the regulatory legal acts of the National Bank on licensing payment system operators' activities.

60. An international payment system must register with the National Bank to provide services for the use of bank payment cards in the territory of the Kyrgyz Republic.

The activity of an international payment system in the territory of the Kyrgyz Republic without registration with the National Bank is prohibited.

61. For the registration of an international payment system, the operator of the international payment system shall submit the following original documents or duly certified copies thereof to the National Bank:

1) an application for registration of the international payment system, indicating the following information:

• name of the international payment system;

• name of the international payment system operator and information on the legal and actual addresses of the operator;

2) a copy of the certificate and/or other equivalent document of state/accounting registration of the legal entity, confirming its legal status and country of origin;

3) copies of the international payment system's registration certificate, licenses/certificates, and other documents (if applicable) confirming the right to carry out activities for processing and servicing international payment cards, issued by the authorized financial supervisory body of the country of origin that licenses/regulates the specified activity, or a written confirmation from this body/legal company that such permission/confirmation is not required by the legislation of the country of origin (it is not a licensed/regulated type of activity);

4) a standard agreement with system participants.

An international payment system and/or its operator must also provide access to the rules and tariffs of the international payment system.

62. Official documents of foreign states submitted for the registration of an international payment system must be legalized in the prescribed manner, unless otherwise provided by international treaties in force to which the Kyrgyz Republic is a party.

Documents containing more than one sheet must be numbered page by page, stitched, signed, and duly certified.

Documents in a foreign language must contain a duly certified translation into the state and/or official languages of the Kyrgyz Republic.

If necessary, upon request of the National Bank, individual documents must be submitted in electronic form.

63. The period for the National Bank to review an application for registration of an international payment system is 15 (fifteen) calendar days. The National Bank shall notify the operator of the international payment system in writing of the decision taken within 3 (three) working days from the date of the decision.

If the submitted documents do not meet the requirements of the National Bank, the document review period begins from the date the National Bank receives documents that meet the stated requirements.

The final decision on the results of reviewing documents for registration is made after the National Bank receives copies of the application and other documents in paper form, unless otherwise provided by the regulatory legal acts of the National Bank.

63-1. In case of non-compliance of the documents with the established requirements and/or submission of an incomplete package of documents, they shall be returned for refinement.

Additional/refined documents, taking into account comments, must be submitted to the National Bank within no more than 10 (ten) working days from the date the international payment system/operator of the international payment system receives the documents for refinement. These documents may be submitted in electronic form in advance, with mandatory subsequent submission of paper copies.

63-2. If documents that do not comply with the requirements of this Regulation and/or are incomplete are submitted more than twice, as well as in case of non-submission/lack of access to the rules and tariffs of the international payment system, the National Bank has the right to refuse registration of the international payment system, by sending a corresponding written notification within the established period, indicating the reasons for refusal.

64. In case of a positive decision based on the review of the registration application, the National Bank assigns a registration number to the international payment system, includes information about it in the register of international payment systems for settlements using bank payment cards in the territory of the Kyrgyz Republic (hereinafter – the register of international payment systems) and sends a written notification of registration with the assigned registration number to the international payment system/operator of the international payment system within the established period.

The procedure for maintaining the register of international payment systems is established by the National Bank.

65. The international payment system/operator of the international payment system is obliged to notify the National Bank in writing of any changes to the information specified during the registration of the international payment system, within 3 (three) working days from the moment the changes occur.

Based on the information provided, if necessary, the National Bank shall make a corresponding entry in the register of international payment systems within 3 (three) working days.

66. Documents submitted to the National Bank by international payment systems/operators of international payment systems are not returned.

67. An international payment system and/or its operator, after completing the registration procedure, must provide the National Bank with permanent access to the system's documents (rules, current tariffs, standard agreements, participation requirements, news, reports, etc.), including on their websites.

67-1. The National Bank shall annul the registration of an international payment system and make a corresponding entry in the register of international payment systems in the following cases:

1) in case of revocation (annulment) of the international payment system's and/or its operator's registration/permits (licenses/certificates/registration certificates, etc.) for the right to carry out activities for processing and servicing international payment cards, previously issued by the authorized financial supervisory body of the country of origin that licenses/regulates the specified activity;

2) in case the operator of the international payment system submits an application for the exclusion of the international payment system from the register of international payment systems in the National Bank or other written notification of the cessation of activity in the territory of the Kyrgyz Republic. The operator of the international payment system shall submit the application only after final settlement with payment system participants.

The National Bank shall notify the operator of the international payment system, commercial banks of the Kyrgyz Republic, and other interested parties in writing of the annulment of registration, and shall also post information about the annulment of registration on its official website.

An international payment system and its operator must cease providing services for settlement systems using international bank payment cards in the territory of the Kyrgyz Republic no later than the day of the international payment system's exclusion by the National Bank from the relevant register and the posting of information about this on its official website.

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