Central bank to issue rules for EMI, OPS co-ops

The Bangko Sentral ng Pilipinas (BSP) is seeking to issue guidelines for cooperatives in the electronic money and payments systems businesses.

The central bank is looking to issue a joint memorandum circular with the Cooperative Development Authority (CDA) to establish guidelines and regulatory requirements for covered cooperatives to “harmonize existing laws on payments with applicable laws on cooperatives,” based on a draft circular posted on its website.

This comes after the BSP and CDA signed a memorandum of agreement in October to better supervise covered cooperatives. The agreement between the two agencies covered the adoption of a comprehensive regulatory framework on covered cooperatives.

The guidelines aim to “promote inclusive digital payments ecosystem, broader access to digital payments services, and contribute to the development of the Philippine economy.”

The draft rules define covered cooperatives as those that are licensed as electronic money issuer-nonbank financial institutions (EMI-NBFI) and licensed and/or registered as Operators of Payment Systems (OPS) by the central bank.

The circular also “delineates the respective authorities of BSP and CDA with respect to the activities that they respectively supervise and establishes formal lines of communication to facilitate cooperative oversight on covered cooperatives.”

The draft rules detail guidelines for the initial handling and resolution of issues to “prevent forum shopping and duplication of supervisory efforts in the handling of issues concerning cooperatives.” They identify the responsible authority depending on the cooperatives’ registration and kind of issue.

“For covered cooperatives, the primary authority responsible shall be BSP without prejudice to the filing of cases or imposition of administrative sanctions by CDA against Covered Cooperatives; Provided that prior to imposition of applicable administrative actions or initiation of judicial action, the CDA shall coordinate with the BSP.”

The rules also include guidelines on dispute settlements.

“Authorities shall exert their best efforts to amicably settle any dispute arising out of, or in connection with this circular. In case of failure to amicably settle such disputes, the Authorities shall observe the applicable dispute resolution provisions of the Administrative Code of 1987.”

Under the draft circular, covered cooperatives engaged or intending to engage in OPS activities must adhere to provisions such as the adoption by the OPS of a governance structure as well as other requirements for the Board of Directors, among others.

Meanwhile, those covered cooperatives engaged or intending to engage in EMI-NBFI activities must adopt the minimum systems and controls prescribed in the Manual of Regulations for Non-Bank Financial Institutions and ensure e-money is issued and redeemed at face value and strict adherence to BSP regulations, among others. — Luisa Maria Jacinta C. Jocson