Clearing: means the process of transmitting, reconciling and, in some cases, confirming transactions prior to settlement, potentially including the Netting of transactions and the establishment of final positions for settlement.
Clearing and Settlement System: means a system established for (a) the clearing or settlement of payment obligations; or (b) the clearing or settlement of obligations for the transfer of book-entry securities, or the transfer of such securities.
Currency: means the State’s official national currency notes and coins, which unit is referred to as the “Dirham”.
Default Arrangements: in respect of a Financial Infrastructure System, means the arrangements in place within the system for limiting systemic and other types of risk in the event of a Participant Person appearing to be, or likely to become, unable to meet his obligations in respect of a Transfer Order; and would include any arrangements that have been enforced by the System Operator or Settlement Institution for the following: (1) the Netting of obligations owed to or by a Participant Person; (2) the closing out of open financial position of a Participant Person; or (3) the realization of collateral securities to secure payment of obligations owed by the Participant Person.
Designated System: means any Financial Infrastructure System designated by the Central Bank as systemically important, in accordance with the provisions of the Central Bank Law and this Regulation.
Financial Free Zones (FFZ): means free zones subject to the provisions of Federal Law No 8 of 2004, regarding Financial Free Zones, and amending laws.
Financial Infrastructure System: means either (1) a Clearing and Settlement System or (2) a Retail Payment System, established, operated, licensed, or overseen by any of the Regulatory Authorities in the State.
Large-value Payment System (LVPS): means a Clearing and Settlement System that is designed primarily to process large-value and/or wholesale payments typically among financial market participants (so-called wholesale payments) or involving money market, foreign exchange or many commercial transactions, excluding bilateral clearing and settlement arrangements and relationships which do not constitute a “system”.
License: means a License issued by the Central Bank to an SO and/or SI to operate an LVPS in the State. The License shall be valid for a period of five years, unless it is suspended or revoked by the Central Bank.
Netting: in respect of a Clearing and Settlement System, means the conversion of the various obligations owed to or by a Participant Person towards all the other Participant Persons in the system, into one net obligation owed to or by the Participant Person.
Operating Rules: means rules set up by the System Operator to cover the operation of a Financial Infrastructure System including, but not limited to, Participant Person account opening and maintenance, contractual relationships with and among Participant Persons, Default Arrangements, payment and settlement processing, Netting and collateral arrangements, authorization and post-transaction processes.
Participant Person: in respect of a Financial Infrastructure System, means a Person who is party to or participant of the arrangements for which the system has been established.
Person: means a natural or juridical person, as the case may be.
Principles of Financial Market Infrastructures (PFMI): means the international standards for financial market infrastructures (i.e. payment systems, central securities depositories, securities settlement systems, central counterparties and trade repositories) issued by the Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO). The PFMI are part of a set of 12 key standards that the international community considers essential to strengthening and preserving financial stability.
Regulation: means the Large-value Payment Systems Regulation.
Regulatory Authorities: means the Central Bank and the Securities & Commodities Authority.
Retail Payment System: means any fund transfer system and related instruments, mechanism, and arrangements that typically handles a large volume of relatively low-value payments in such forms as cheques, credit transfers, direct debit, or card payment transactions.
Settlement Institution (SI): means an institution that provides settlement services to a Financial Infrastructure System, settlement accounts in one currency or multi-currency in the Financial Infrastructure System and in certain cases, grants access to intraday liquidity to Participant Persons.
State: means the United Arab Emirates.
System Operator (SO): means a Person responsible for the operation of a Financial Infrastructure System including the comprehensive management of all risks in the Financial Infrastructure System, and ensuring that the operation of the system is in accordance with this Regulation and other relevant regulations issued by the Central Bank.
Systemically Important Financial Infrastructure System: a Financial Infrastructure System which has the potential to trigger or transmit systemic disruptions to the State’s monetary and financial stability; this includes, among other things, systems that are the sole Financial Infrastructure System in a jurisdiction or the principal system in terms of the aggregate value of payments, and systems that mainly handle time-critical, high-value payments or settle payments used to effect settlement in other Financial Infrastructure Systems.
Transfer Order: in respect of a Financial Infrastructure System, means any of the following instructions: (1) instructions by a Participant Person to make funds available to another Participant Person to be transferred, on a book-entry basis, in the accounts of the SI for a Clearing and Settlement System; or (2) instructions for discharge from obligation to pay, for the purposes of the Operating Rules of a Clearing and Settlement Systems; or (3) instructions by a Participant Person to either settle an obligation by transferring a book-entry security, or transferring those securities; or (4) instructions by a Participant Person that result in liability or discharge of retail operations payment obligation.