LOST FORCE

in accordance with the resolution of the Board of the National Bank of the Kyrgyz Republic

of 15 July 2015 No. 38/4

Registered with the Ministry of Justice of the Kyrgyz Republic

28 April 2006. Registration number 48-06

Bishkek

of 23 March 2006 No. 7/8

RESOLUTION OF THE BOARD OF THE NATIONAL BANK

OF THE KYRGYZ REPUBLIC

On approval of the "Policy on Supervision

of the Payment System of the Kyrgyz Republic"

Having considered the draft "Policy on Supervision of the Payment System of the Kyrgyz Republic", in accordance with Articles 3 and 43 of the Law of the Kyrgyz Republic "On the National Bank of the Kyrgyz Republic", the Board of the National Bank of the Kyrgyz Republic resolves:

1. To approve the "Policy on Supervision of the Payment System of the Kyrgyz

2. Republic" (attached).

   2. The Payment Systems Department, together with the Legal Department, shall in the established procedure carry out state registration of this resolution with the Ministry of Justice of the Kyrgyz Republic.

   3. This resolution enters into force from the moment of official publication after state registration with the Ministry of Justice of the Kyrgyz Republic.

   4. The Payment Systems Department shall bring this resolution to the attention of commercial banks of the Kyrgyz Republic, OJSC "Settlement and Savings Company", regional offices and the Representative Office of the National Bank of the Kyrgyz Republic in Batken oblast.

   5. After publication of the registered normative legal act, inform the Ministry of Justice of the Kyrgyz Republic of the source of publication (name of the publication, its number and date).

   6. Control over the execution of this resolution shall be entrusted to the Deputy Chairman of the National Bank of the Kyrgyz Republic Moldokanov Sh.I.

   For the Chairman of the Board

   Acting Chairman of the Board of the National

   Bank of the Kyrgyz Republic M. Ishenbaev

                                                Approved [by resolution](https://cbd.minjust.gov.kg/300420) of the Board of the National Bank of the Kyrgyz Republic of 23 March 2006 No. 7/8
   

@1 POLICY

on supervision of the Payment System of the Kyrgyz Republic

1. General provisions

1.1. This Policy has been developed in accordance with the Civil

Code of the Kyrgyz Republic, the laws of the Kyrgyz Republic "On the

National Bank of the Kyrgyz Republic", "On Banks and Banking

Activity in the Kyrgyz Republic", "On Electronic Digital Signature"

"On Electronic Payments", the regulation "On the Basic Provisions for the Organization of the Payment System in the Kyrgyz Republic" and other normative legal acts of the Kyrgyz Republic (hereinafter - the legislation of the Kyrgyz Republic) and international standards on payment systems and the exercise of supervision over payment systems.

1.2. The Policy on supervision of the Payment System of the Kyrgyz Republic is aimed at ensuring the stability of non-cash settlements for users (legal entities and individuals) through the Payment System of the Kyrgyz Republic.

1.3. Supervision of the Payment System of the Kyrgyz Republic is the activity of the National Bank of the Kyrgyz Republic (hereinafter - the NBKR), based on Article 3 of the Law of the Kyrgyz Republic "On the NBKR", to ensure the effective and uninterrupted functioning of the Payment System of the Kyrgyz Republic, which is formed by several types of payment systems serving various segments of the national financial market.

1.4. The Policy defines the purpose, principles of exercising supervision over the Payment System of the Kyrgyz Republic, the objects and procedure for the NBKR's exercise of supervision, as well as the list of instruments used by the NBKR for these purposes.

2. Terms and definitions used

2.1. Systemically important payment system - is a system that contributes to the stable functioning of national financial markets.

2.2. Non-systemically important payment system - is a system that contributes to maintaining public confidence in the national currency as a means of cash and non-cash payment and settlement.

2.3. Interbank communication network (ICN) - part of the technical infrastructure of the Payment System of the Kyrgyz Republic, uniting the NBKR, commercial banks and other financial and credit institutions and intended for the exchange of data in real time on trade, payment and statistical systems between the NBKR and ICN participants.

2.4. Payment system operator - a legal entity ensuring the functioning of the payment system and having concluded with the participants an agreement on participation in the payment system, according to which the operator and the participants undertake to carry out their activities within the framework of the payment system and in accordance with the rules of the system.

2.5. Payment system - an interconnected system of technologies, procedures, rules, payment instruments and funds transfer systems ensuring money circulation.

2.6. Payment System of the Kyrgyz Republic - the aggregate of payment systems operating in the territory of the Kyrgyz Republic for the transfer of funds in accordance with the legislation of the Kyrgyz Republic, the operators of which are residents or non-residents of the Kyrgyz Republic.

2.7. Payment system user - a legal entity or individual using the payment services of a payment system participant or a provider of services under the money transfer system for settlements and money transfers in the course of economic or other activity, in whose favor and on whose behalf the transfer of funds is carried out.

2.8. Provider of services under the money transfer system - a special operator for the provision of services under the money transfer system. The operator accepts cash or its equivalent from an individual or legal entity on the basis of official permission or on a commercial basis in accordance with legislation in order to ensure the payment of this cash or its equivalent or to create conditions for their payment to a third party in another place.

2.9. Systemically important payment system - a payment system in which:

1. in the event of failures in functioning for operational and technical reasons, serious shocks may arise in the national banking system or in the national financial system;

2. if the rules of the system do not exclude that the insolvency of one of the participants may lead to the emergence of liquidity risk for other participants and the creation of a "domino effect", which may also lead to serious shocks in the national financial system.

Systemically important payment systems include the large-value payment system and the interbank clearing system.

2.10. Large-value payment system - a type of payment system in which transfers are carried out for monetary obligations of financial market participants (the national money, foreign exchange and capital and securities markets), as well as transfers related to the use of monetary policy instruments. These systems are characterized by settlements for a small number of participant payments in large amounts.

2.11. Retail payment systems - a type of payment system in which payments are made for monetary obligations of individuals and legal entities not related to their participation in national financial markets. These systems are characterized by a large number of participant payments in small amounts with final settlement on the basis of clearing.

2.12. Card payment settlement system - a type of payment system for processing retail payments, which is a set of norms, rules, institutions and software and hardware for organizing non-cash settlements using payment cards. The card payment settlement system is an important payment system.

2.13. Money transfer system - a type of payment system for the acceptance by a provider of funds from the population on the condition that these funds will be paid in another place. Through money transfer systems, both local money transfers and transfers crossing national borders are carried out. Money transfer systems with and without account opening are non-systemically important payment systems.

2.14. Correspondent relationship system - a system allowing cross-border payments to be made and other services to be provided to users on the basis of agreements (agency agreements) on maintaining correspondent accounts between financial and credit institutions of different countries.

2.15. Payment system participant - a financial and credit institution providing payment services to the population in the territory of the Kyrgyz Republic in accordance with legislation. A participant must meet the criteria for participation in the payment system established by the rules of the system. A participant is identified in the payment system on the basis of a unique participant identification code assigned by the operator.

2.16. SWIFT shared access node (SAN) - a hardware and software complex created on the basis of the NBKR's SWIFT complex and providing users with access to the SWIFT network through a common interface.

2.17. Effectively functioning payment system - a system whose rules and technical infrastructure contribute to the development of business activity of users (legal entities and individuals) and which allows reducing the costs of operators and thereby increasing the level of investment attractiveness of providing services for making payments and settlements of users.

2.18. SWIFT - the society for worldwide interbank financial telecommunication, which is the guarantor of the security of various banking operations between financial institutions around the world and was created by the SWIFT society of the same name.

3. Purpose, tasks and principles of supervision
   over the payment system of the Kyrgyz Republic

3.1. The main purpose of exercising supervision over the payment system of the Kyrgyz Republic is to ensure appropriate control and monitoring of the operation of payment systems in order to maintain the stable functioning of the national financial system and confidence in the national currency as a means of cash and non-cash settlement.

3.2. Maintaining the stable functioning of the national financial system presupposes meeting the requirements of users with respect to:

1. payment processing times - a guarantee of settlement within the period established by legislation;

2. security of payments and settlements - a guarantee of the return of funds in the amount determined by legislation in the event of non-execution of settlement by the payment system;

3. accessibility of payment services - provision of access to payment services without restrictions for all users and during the day in the period of time required by users, but limited by legislation establishing the operating regulations of payment systems;

4. cost of making payments and settlements - the tariff for making a payment must correspond to the level of urgency, security, accessibility and level of service expected by users.

3.3. To achieve the purpose of supervision over the payment system, the NBKR performs the following tasks:

1. exercises and establishes the procedure for monitoring the functioning of the Payment System of the Kyrgyz Republic, including:

• receives information from participants, operators of individual payment systems and money transfer systems and other organizations providing services for making payments and settlements;

• verifies the organization and functioning of individual payment systems in accordance with the normative legal acts of the NBKR;

2. assesses the qualitative and quantitative characteristics of the functioning of individual payment systems for compliance with international standards, in particular the "Key Principles for Systemically Important Payment Systems" (Appendix No. 1), as well as the established requirements of the NBKR;

3. applies measures of influence to operators of individual payment systems in order to intensify their activities to improve their own payment system, including by:

• developing normative legal acts defining the conditions and procedure for the organization and functioning of payment systems;

• verifying the activities of participants and operators of payment systems in accordance with the normative legal acts of the NBKR;

• participating in decision-making by the governing body of the operator.

3.4. For the purposes of effective supervision over the payment system of the Kyrgyz Republic, the NBKR is guided by the following principles:

1. Publicity of supervision policy. The NBKR publicly declares its policy on exercising supervision over the payment system of the Kyrgyz Republic, which sets out:

• criteria for assessing payment systems (systemically important, important, non-systemically important);

• standards to which payment systems must correspond, both organizationally and functionally;

• the content of the NBKR's activity in exercising supervision over the payment system of the Kyrgyz Republic.

2. Adherence to international standards. When establishing requirements for payment systems, the NBKR is guided by the provisions of international standards and the legislation of the Kyrgyz Republic with respect to payment and settlement systems.

3. Correspondence of powers and duties. The NBKR takes measures to maintain sufficient resources, including qualified personnel, an appropriate organizational structure (subdivision) of the NBKR responsible for exercising supervision over the payment system of the Kyrgyz Republic, allowing the effective use of these resources, methods and instruments of supervision over the payment system of the Kyrgyz Republic to achieve the above purposes of supervision.

4. Consistency in conducting supervision. When exercising supervision over the Payment System of the Kyrgyz Republic, the NBKR does not create competitive advantages for payment systems managed by the NBKR, in view of imposing identical requirements on all payment systems and vesting different subdivisions of the NBKR with powers to supervise and manage their own payment systems. The NBKR's activity in exercising supervision over the payment system of the Kyrgyz Republic is aimed at preserving and improving the efficiency of the activities of all types of payment systems operating in the territory of the Kyrgyz Republic.

5. Coordination of actions in the field of supervision. The NBKR organizes the performance of its duties in supervising the payment system of the Kyrgyz Republic in a manner compatible with its other tasks with respect to payment systems. The NBKR takes measures to coordinate the activities of the NBKR's internal subdivisions in exercising supervision over the payment system of the Kyrgyz Republic in order to reduce the burden on supervised systems and improve the effectiveness of supervision. Where necessary, the NBKR interacts with interested national executive authorities in the said area, supervisory authorities of other countries and international financial institutions in order to enhance the effectiveness of supervisory activity with respect to international payment systems whose participants are located in the territory of the Kyrgyz Republic.

6. Independence of assessment of the supervisory function. The NBKR's procedures for exercising supervision over the payment system of the Kyrgyz Republic are checked by external auditors, international financial organizations within the framework of financial sector assessment programs, or by a body specially created for this purpose in accordance with legislation.

7. Objects and content of supervision
   over the payment system of the Kyrgyz Republic

4.1. The objects of supervision over the payment system of the Kyrgyz Republic are the following categories of payment systems:

1. systemically important payment systems: the large-value payment system and the interbank clearing system for payments;

2. important payment systems: card payment settlement systems (local and international);

3. non-systemically important payment systems: money transfer systems with account opening and without account opening (local and international).

4.2. The NBKR exercises control over the system of correspondent relations of participants for making cross-border payments, the use of payment instruments and the functioning of the technical infrastructure of the Payment System of the Kyrgyz Republic:

1. SWIFT SAN;

2. interbank communication network.

4.3. The NBKR exercises supervision over the payment system of the Kyrgyz Republic on a continuous basis in the form of a cyclically repeating process in three main directions:

1. monitoring the functioning of payment systems at the qualitative and quantitative levels on the basis of collecting information on the operation of the systems;

2. assessing payment systems for compliance with accepted standards and taking a decision on assessing the effectiveness of the operation of individual payment systems;

3. taking measures aimed at improving their own payment systems.

5. Monitoring the functioning of payment systems

5.1. Monitoring the functioning of payment systems presupposes the following measures:

1. collection of regular statistical reporting generated by payment system operators or payment system participants (in the case where the operator is not a resident of the Kyrgyz Republic), as well as other organizations providing services for making payments and money transfers, allowing data to be obtained on the quantitative characteristics of the functioning of the infrastructure of the payment system of the Kyrgyz Republic, including:

• the volume and number of daily payments and money transfers per day, month;

• the average daily number of payments, money transfers and their amounts during the year;

• peak values of the number and amounts of processed payments and money transfers per day, during the year;

• the percentage of the number and amounts of payments and money transfers accounted for by the 5 largest participants of the payment system (concentration coefficient);

• payments and money transfers broken down by payment instruments used for individuals and legal entities separately;

• payments and money transfers broken down by the accounts used, opened for individuals and legal entities, used for making non-cash payments;

• payments and money transfers not accepted for processing by the system, indicating the reasons;

• other data;

2. periodic (at least once a year) collection of information on the qualitative characteristics of payment systems by sending the "Questionnaire for assessing the payment system" (Appendix No. 2) directly to operators or participants of payment systems (in the case where the operators are non-residents of the Kyrgyz Republic), in particular containing the following questions:

• structure of the normative and contractual framework;

• access criteria for participants;

• current list of participants;

• organizational structure of payment system management;

• principles of functioning of the payment system;

• fundamental provisions on the distribution of responsibility between the operator and participants;

• principles of tariff setting;

• principles of ensuring business continuity;

3. holding meetings with the operator's senior staff to discuss the current state of the payment system;

4. ensuring access to materials of the assessment of compliance of the functioning of the payment system carried out by the operator itself;

5. ensuring access to official system documentation (system rules, contracts and agreements concerning the functioning of the payment system, the operator's business plan, business continuity plan);

6. ensuring access to the results of inspection checks regarding the activities of banks as participants of payment systems;

7. ensuring access to the conclusions of external and internal auditors checking the activities of the payment system operator;

8. on-site checks of the compliance of the functioning of the payment system with official documentation;

9. analysis of media sources on the functioning of payment systems.

6. Assessment and decision-making with respect to
   individual payment systems

6.1. The NBKR assesses the compliance of the functioning of the payment system with the requirements of standards according to the categories of payment systems:

0. for systemically important payment systems - full compliance with the Key Principles and the established requirements of the NBKR;

1. for important payment systems - observance of Key Principles I, II, VII, VIII, IX, X and full compliance with the established requirements of the NBKR;

2. for non-systemically important payment systems - compliance with the requirements of the NBKR and partial observance of the Key Principles for systemically important payment systems.

6.2. The NBKR assesses the functioning of payment systems on the basis of data on quantitative and qualitative characteristics obtained as a result of monitoring, and is guided by generally accepted international practice on the methodology for assessing the functioning of payment systems for compliance with the above standards.

6.3. Depending on the results of the assessment of data on the structure of an individual payment system, its management and its compliance with the established requirements and standards of the policy, the NBKR takes a decision:

1. on maintaining the current level of functioning of the payment system;

2. on the need to make changes to the system being assessed in order to improve the efficiency of the operation of the individual payment system;

3. on the use of measures of influence with respect to the system being assessed, if necessary.

7. Measures of influence for the improvement
   of payment systems

7.1. The NBKR initiates the introduction of changes to an individual payment system using the following methods and means to achieve the purpose of supervision:

1. Influence by persuasion. The NBKR conducts negotiations with the operator and participants of the system using arguments obtained as a result of qualitative analysis and the validity of the results of monitoring and assessment.

2. Open statements. The NBKR uses open statements in order to exert a positive influence on the system, strengthen market self-discipline, encourage the system, its participants and other interested persons to draw their own conclusions about the structure of the system and its management, thereby motivating the introduction of changes in the event of identifying possible shortcomings, while observing the necessary level of confidentiality.

3. Agreements and contracts. For the purpose of making changes to the system, the NBKR may initiate the use of agreements or contracts between the NBKR and the system, including also agreements and contracts with participants of the system. Such agreements and contracts may take various forms, including special memoranda of understanding, agreements on opening a settlement account and service agreements in relation to NBKR settlement services, and they may be used to fix the requirements and standards that the system must meet, as well as the role of the central bank in ensuring their observance.

4. Participation in systems. In the case of systemically important or important systems, the NBKR may decide to participate in the management of the system through ownership of shares of the system operator on the same terms as other owners, the right of "veto" in relation to the most important decisions, or simply a "seat on the board of directors" with access to information constituting property and the opportunity to express a point of view.

5. Cooperation with other official bodies. The NBKR may cooperate with banking supervision bodies, banking regulatory bodies, other financial organizations, as well as with international organizations and central banks of other countries that are owners, participants, users of the system or regulatory bodies, in order to implement changes in the system.

7.2. The NBKR, if necessary, may use measures of influence or sanctions in relation to the assessed system or to operators and participants of the payment system, established by the legislation of the Kyrgyz Republic.

7.3. Depending on the identified violations of the requirements of the NBKR's regulatory legal acts, the NBKR applies the following measures:

1) warning;

2) written agreement;

3) written prescription;

4) termination of the correspondent account agreement;

5) imposition or collection of fines on the grounds established by the legislation of the Kyrgyz Republic;

6) suspension or revocation of the license to conduct all or certain types of banking operations or to perform the functions of a payment system operator in agreement with the bodies supervising financial and credit institutions;

7) and other response measures.

7.4. The NBKR initiates enforcement of a decision in court in relation to a system that fails to comply with the decisions of the National Bank on supervision of the Payment system of the Kyrgyz Republic.

7.5. The NBKR's materials on the assessment of the functioning of the payment system and recommendations for improving the system are provided for information to the operator of the given payment system.

7.6. The NBKR publishes information on the results of supervision and assessment of the effectiveness of payment systems in regular analytical reports on the operation of the payment system of the Kyrgyz Republic, while observing the necessary level of confidentiality.

8. Final provisions

1.1. Participants and operators of payment systems operating in the territory of the Kyrgyz Republic must develop internal procedures for complying with the requirements of this policy.

1.2. Payment system operators must disclose to the public in periodic reports the internal control procedures applied to ensure the proper operation of the system, including internal audit mechanisms.

1.3. The NBKR organizes the performance of its supervisory duties in a manner compatible with its other tasks in relation to payment systems. The NBKR promotes the timely disclosure to the public of the general principles of policy, including the policy on risk management in the payment system of the Kyrgyz Republic, which affect the reliability of systemically important payment systems.

1.4. The NBKR publishes information on the effectiveness of supervision of the payment system in regular analytical reports on the operation of the payment system.

1.5. This policy is subject to review at least once every three years.

Annex No. 1

KEY PRINCIPLES

for systemically important payment systems

I. The system must have a well-developed legal basis in all relevant jurisdictions.

II. The rules and procedures of the system must give participants a clear understanding of the impact of the system on each of the financial risks that they bear by virtue of participating in the system.

III. The system must have clearly defined procedures for managing credit risks and liquidity risks, establishing the corresponding responsibility of the system operator and participants and containing appropriate incentives for managing and containing these risks.

IV(*). The system must ensure rapid final settlement on the value date, preferably during the day or, at a minimum, at the end of the day.

V(*). A system in which multilateral netting is carried out must, at a minimum, be able to ensure the timely completion of daily settlements in the event of the inability of the participant with the largest individual settlement obligation to settle.

VI. The assets used for settlement should preferably be claims on the central bank; if other assets are used, they must have insignificant or zero credit risk.

VII. The system must ensure a high degree of security and operational reliability and must have backup procedures for the timely completion of data processing for the day.

VIII. The means of making payments offered by the system must be practical for users and effective for the economy.

IX. The system must have objective and publicly announced criteria for participation, ensuring fair and open access.

X. The system's management procedures must be effective, accountable and transparent.

(*) Systems should strive to exceed the minimum requirements contained in these two principles.

Tasks of the central bank in applying the key principles

A. The central bank must clearly define its goals in relation to payment systems and must make public its role and main types of policy in relation to systemically important payment systems.

B. The central bank must ensure compliance with the key principles by the systems it manages.

C. The central bank must supervise compliance with the key principles by systems it does not manage, and must have the capabilities to carry out such supervision.

D. In ensuring the safety and effectiveness of payment systems through the key principles, the central bank must cooperate with other central banks and any other relevant national or foreign institutions.

Annex No. 2

QUESTIONNAIRE

for assessing the payment system

Requirements for completion.

1. This questionnaire is completed at least once a year by payment system operators and is provided to the NBKR upon request.

2. The questionnaire is completed in accordance with the categories of systems (systemically important, important, not systemically important).

3. The questionnaire is also intended for the operator and/or owner of the system to conduct a regular (at least once a year) self-assessment of the payment system.

Part A. Payment systems

A.1. General information about the system, regulatory legal framework

for the system

(1) System operator.

(2) Purpose.

(3) Regulatory legal framework governing the operation of the system.

(4) Requirements for participants' access to the system.

(5) Turnover ratio of funds.

(6) Operating regulations, principles of functioning.

(7) Participants of the system.

(8) Tariff for making a payment.

(9) Software.

(10) Methods of ensuring business continuity.

(11) Personnel of the gross system.

(12) Improvement plans.

A.1.1. Structure of the system and settlement.

A.1.2. Statistics:

(1) Number of participants.

(2) Average number of payments per day.

(3) Average volume of payments per day.

(4) Of these, large-value payments.

(5) Average cost of a payment.

(6) Dependence of the cost of a payment on the time of transmission and on the volume of payments.

(7) And others.

A.1.3. Additional information:

A.1.3.1. Reasons for refusal to accept payments.

(1) erroneous documents or incomplete details;

(2) exceeding the limit;

(3) and others.

A.1.3.2. Plans to change the situation.

(1) Plans to make changes or improve the payment system.

A.2. Transparency and understanding of financial risks

A.2.1. Principles, rules and procedures in relation to financial risks.

General description.

A.2.2. Typical questions:

A.2.2.1. Clarity and completeness of the system's operation.

A.2.2.2. Purpose of the system, schedule and risk management procedures.

A.2.2.3. Legal basis and role of its participants.

A.2.2.4. Whether participants' access to the system is free.

A.2.2.5. Freedom of action, rights and obligations of the operator and participants.

A.2.2.6. Decision-making in emergency situations.

A.2.2.7. Organizational preparation of participants for monitoring their activities.

A.2.3. Timeliness and sufficiency of providing information for risk management.

A.2.4. Measures ensuring that participants fully understand their exposure to risks.

A.2.5. Plans to change the existing situation.

A.2.6. Operator's opinion on the effectiveness of the planned measures.

A.3. Management of credit risk and liquidity risk

A.3.1. Financial risks of participants.

A.3.2. Real or potential risk for the National Bank.

A.3.3. Credit risk management instruments:

A.3.3.1. Membership rules (capital requirements, pre-funding of collateral, etc.).

A.3.3.2. Minimum and maximum periods between acceptance of a payment and final settlement on it.

A.3.3.3. Distribution of responsibility among participants in the event of bankruptcy of one of the participants.

A.3.4. Liquidity risk management instruments:

A.3.4.1. Queue mechanisms.

A.3.4.2. Sources of liquidity:

A.3.4.3. Overnight credit. Issuance procedures.

A.3.4.4. Separation of payment flows by time and value.

A.3.4.5. Explicit or implicit obligations of the operator to ensure the liquidity of the system.

A.3.5. General instruments:

A.3.5.1. Participants' access to information on account balances and their positions.

A.3.5.2. Timely monitoring by the system operator.

A.3.6. Incentives for managing liquidity risk and credit risk.

A.3.6.1. Mechanism for distributing losses among clearing participants.

A.3.6.2. Pricing depending on the control of liquidity risk.

A.3.7. Problems over the last three years.

A.3.8. Plans to change the current situation.

A.3.9. Operator's opinion on the effectiveness of the planned measures.

A.4. Final and irrevocable nature of operations

A.4.1. Level of irrevocability at each stage of payment.

A.4.2. Conditions for non-acceptance of a payment by the system or by the receiving participant.

A.4.3. Awareness of the participant in refusal of acceptance.

A.4.4. Closing of the position at the end of the day in the absence of liquidity.

A.4.5. Official mechanisms for ensuring strict compliance with the operating regulations in the form of fines or other sanctions.

A.4.6. Official confirmation of final settlement.

A.4.7. Elimination of the consequences of errors.

A.4.8. Problems of the last 3 years.

A.4.9. Plans to change the current situation.

A.4.10. Final settlement.

A.5. Clearing systems.

A.5.1. Net balance is calculated on the basis of multilateral netting once a day.

A.5.2. Processing of settlements on net positions.

A.5.3. Information on net positions of clearing participants.

A.5.4. Protection against excessive risk on the part of a participant.

A.5.5. Covering the debit position of a bankrupt participant.

A.5.6. Collateral or reserve fund to cover the debit position of a participant.

A.5.7. Who is the last resort for ensuring liquidity in the system.

A.5.8. Operator of the clearing system.

A.5.9. Procedures for ensuring final settlement and liquidity management mechanisms.

A.5.10. Problems of the last 3 years.

A.5.11. Plans to change the current situation.

A.5.12. Your opinion on the issue of ensuring final settlement in the event of insolvency of one participant, two participants.

A.6. Settlement assets

A.6.1. Assets for settlements.

A.6.2. Funds held in the correspondent account of a commercial bank with the National Bank.

A.6.3. Criteria for assessing the liquidity and creditworthiness of the settlement bank.

A.6.4. Measures to protect clearing participants from bankruptcy in the system.

A.6.5. Conversion of assets into other types of assets.

A.6.6. Assets in foreign currency.

A.6.7. Problems of the last 3 years.

A.6.8. Plans to change the current situation.

A.7. Security and operational reliability

A.7.1. Security structure of the clearing system.

A.7.2. Periodic audit of the system's operation.

A.7.3. Documentation on the actual state of the system.

A.7.4. The security and reliability of computer systems and related data transmission networks were checked by independent specialists.

A.7.5. Presence of a strictly defined sequence of operations in the software module.

A.7.6. Means of backing up current information.

A.7.7. Target level for full system recovery.

A.7.8. Business continuity:

A.7.8.1. Simplicity and practicality.

A.7.8.2. Reflection of continuity mechanisms in the system documentation.

A.7.8.3. Reflection of the crisis management and information dissemination procedure in the system documentation.

A.7.9. Disaster recovery plans for business activity.

A.7.10. Frequency of system recovery checks.

A.7.11. Statistics for the last 3 years.

A.7.12. Plans to change the current situation.

A.7.13. Degree of security and operational reliability of the system.

A.8. Practicality and effectiveness

A.8.1. Official pricing policy in payment systems.

A.8.2. Payment processing times.

A.8.3. Interaction with the Association of Banks/participants.

A.8.4. Mechanisms, procedures and policy measures on tariffs.

A.8.5. Timeframes for complete processing of payments.

A.8.6. Cost-benefit analysis.

A.8.7. Measures to improve the effectiveness of the payment system.

A.8.8. Problems over the last 3 years.

A.8.9. Plans to change the current situation.

A.8.10. Effectiveness and practicality of making payments for users of the system.

A.9. Access to the system

A.9.1. Conditions of access to the system.

A.9.2. A direct participant of the payment system is.

A.9.3. Rules of access to the payment system.

A.9.4. Indirect access to the clearing system.

A.9.5. Procedure and rules for making payments by participants.

A.9.6. Tariffs.

A.9.7. Requirements for access to the system.

A.9.8. Exit of a participant from the system.

A.9.9. System operator.

A.9.10. Problems or issues over the last 3 years.

A.9.11. Plans to change the current situation.

A.9.12. Objective and publicly disclosed criteria for participation.

A.10. System management

A.10.1. General description.

A.10.2. Mechanisms for achieving consensus.

A.10.3. Short- and medium-term business plans of payment system operators.

A.10.4. Reporting on performance results.

A.10.5. Information on the owners of the system and its management.

A.10.6. Adoption of major decisions on changes in the system.

A.10.7. Plans to ensure full compliance with all key principles.

A.10.8. Changes and reforms that are in the process of implementation.

A.10.9. Effectiveness, accountability and transparency of management mechanisms.

Part B. Statistical tables on the number

and volumes of payments processed in the system

Requirements for completion.

1. Statistical reports are provided by the payment system operator on a monthly basis no later than the 5th day of the month following the reporting month.

2. Reports must contain the following information:

• volume and number of daily payments and money transfers per day, month;

• average daily number of payments, money transfers and their amounts during the year;

• peak values of the number and amounts of processed payments and money transfers per day, during the year;

• percentage of the number and amounts of payments and money transfers attributable to the 5 largest participants of the payment system (concentration ratio);

• payments and money transfers broken down by payment instruments used for individuals and legal entities separately;

• payments and money transfers broken down by accounts used, opened for individuals and legal entities, used for making non-cash payments;

• payments and money transfers not accepted for processing by the system, indicating the reasons;

• and others.

Part C. Requirements for money transfer systems

Requirements for completion.

1. This questionnaire is completed at least once a year by operators of money transfer systems and is provided to the NBKR upon request.

2. The questionnaire is also used by the operator of the money transfer system to conduct a regular self-assessment.

C1. General description of the system.

C2. Regulatory legal and contractual framework.

C3. Type of provider.

C4. Identification of senders/recipients.

C5. Interaction with financial and credit institutions.

C6. Timeframes for making transfers broken down by local/international.

C7. Volumes and number of transfers broken down by local/international.

C8. Peak indicators.

C9. Average indicators.

C10. Information on return/refused/erroneous transfers.

Part D. NBKR requirements for operators

and participants of the Payment system of the Kyrgyz Republic

Requirements for completion.

1. Assessment and verification of compliance with the NBKR's requirements for operators and participants of the payment system of the Kyrgyz Republic is carried out by the NBKR during inspection checks within the framework of supervision of the Payment system of the Kyrgyz Republic at least once a year.

2. Analysis of compliance with the NBKR's requirements is an integral part of the self-assessment of the system conducted by the operator or participant of the system.

3. The results of the self-assessment of the payment system by the operator or participant of the payment system are provided to the NBKR upon request and within the framework of inspection checks.

D1. Compliance with requirements for access to the payment system.

D2. Compliance with the requirements of the NBKR's regulatory documents.

D3. Compliance with the NBKR's security requirements:

1) confidentiality, integrity, authentication during the acceptance and processing of payments. Presence and description of a plan for regular testing of the system;

2) reliability of the degree of security and uninterrupted operation of the payment system:

• Reduction of risks associated with physical damage to hardware and communication lines (restriction of access by unauthorized persons to the premises where equipment related to the payment system is installed);

• Reduction of risks associated with errors in software or its modification;

• Reduction of risks of denial of authorship or of the fact of receipt of an electronic payment document, as well as with disclosure and distortion of data during transmission over a communication channel;

3) compliance with the conditions of confidentiality, reliability and security during electronic payments and work with personal keys of authorized persons of the bank and compliance with the rules for their storage and use.

D4. Compliance with the requirements for completing payment documents:

1) compliance with the requirements for the formats of payment documents established by the National Bank;

2) presence of signatures of persons responsible for the acceptance and processing of payments;

3) presence of clear imprints of seals and stamps;

4) completion of the details of payment documents and affixing of seals, stamps and signatures in the fields intended for them and only within these fields;

5) presence of all details necessary for making a payment and their correct completion;

6) correspondence of the purpose of the payment to its code;

7) presence/absence of corrections, blots, erasures and use of correction fluid on payment documents.

D5. Compliance with requirements when conducting electronic payment documents:

1) presence of all details necessary for making a payment;

2) correspondence of all details of the electronic payment document to its paper counterpart;

3) presence of the corresponding digital signatures in each payment document and their authenticity;

4) the electronic digital signature of payment documents is carried out only by designated responsible persons and their deputies;

5) compliance with the required level of security during the transmission of electronic payment documents, storage of passwords and secret keys;

6) storage and backup copying of electronic payment documents in accordance with the legislation of the Kyrgyz Republic and the regulatory acts of the National Bank;

7) implementation of the established procedure for conducting electronic payments;

8) compliance with the procedure for verifying the authenticity of electronic payment documents.

D6. Compliance with internal regulatory documents:

1) presence of clear, fully documented internal procedures for the operator's activities related to the execution of payment operations.

Regulatory acts must contain:

2) the sequence of making a payment, starting from the acceptance of documents from the client initiating the payment and ending with confirmation of the payment and notification of the client;

3) the level of responsibility of each employee when carrying out the operation of accepting, processing and sending payments;

4) the bank's responsibility to the client in the event of untimely processing of a payment or violation of the client's payment instruction (crediting to another account, failure to make a payment, incorrect indication of the amount, etc.);

5) procedures for internal control of operations of accepting, processing and sending payments.

D7. Compliance with internal security requirements when making payments:

1) the security policy must correspond to the characteristics of the payment acceptance and processing system and be formulated strictly enough to ensure the necessary level of security satisfying the requirements of both the bank itself, the NBKR, and clients;

2) the security policy must define control over the physical

and logical access to the system, its hardware, software and network to protect the system and its data from unauthorized actions both from outside and from within.