1. As stipulated in Article (126) (2) of the Central Bank Law, if a licensed RPS falls within the eligibility for designation as set out in the aforementioned Article, the Central Bank may designate such RPS as systemically important.
    
2. Financial Infrastructure Systems which may be covered by the definition of RPS include, but are not limited to, the following systems:
    
   1. 2.1. Electronic funds transfer system: a system that handles transfer of funds which is initiated through a computer system, for the purpose of ordering, instructing, or authorizing a financial institution to debit or credit a customer’s account. The Central Bank will not license or designate RPS owned and/or operated by licensed banks (e.g. Internet or mobile banking systems, electronic fund transfer systems, etc.) for serving their own customers because such RPS are already subject to the Central Bank’s prudential supervision of the licensed bank as a whole. However, if a licensed bank provides RPS services to other payment service providers or financial institutions, such RPS may be subject to designation if the RPS falls within the designation criteria.
       
   2. 2.2. Payment card system: a set of functions, procedures, arrangements, rules, and most importantly, a Clearing and Settlement System and network infrastructure that enable a holder of a payment card to effect a payment and/or cash withdrawal transaction with a third party other than the card issuer.
       
   3. 2.3. Clearing and Settlement System for SVF¹: a Payment System used to support the SVF business and scheme. An SVF scheme normally requires a Payment System to support their operation. Such a system normally falls within the RPS definition. To avoid regulatory overlap and inducing excess regulatory burden on SVF Licensees, the Central Bank does not intend to designate a Payment System run by a SVF Licensee to support its own SVF business and scheme. It is because the entire SVF business scheme and the related Payment System are already subject to the SVF Regulation, which ensures the safety and soundness of the Payment System including the transfer, clearing and settlement of payment obligations. Nonetheless, if the RPS operated by the SVF Licensee also supports SVF schemes run by other issuers or if a third party operates a Payment System to support other SVF schemes operating in the State, the Central Bank may designate such RPS if it meets the designation criteria.
       
   4. 2.4. Payment gateway: a system that processes, accepts or declines payment transactions on behalf of the merchant secure network connections.
       
3. In forming an opinion as to whether an RPS satisfies the designation criteria, the Central Bank may consider one or more of the following factors in order to determine whether or not the RPS is a Systemically Important Payment System: -
    
   1. 3.1. The estimated aggregate value of Transfer Orders transferred, cleared or settled through the RPS in a normal business day. The foregoing refers to the total value of individual instructions cleared or settled in the RPS. For established RPS during the transitional period, the estimated value can be worked out with reference to historical data and business plan.
       
   2. 3.2. The estimated average value of Transfer Orders transferred, cleared or settled through the RPS in a normal business day. The foregoing refers to the aggregate value of instructions transferred, cleared or settled through the RPS in a normal business day, divided by the number of instructions processed.
       
   3. 3.3. The estimated number of Transfer Orders transferred, cleared or settled through the RPS in a normal business day.
       
   4. 3.4. Whether those transactions or the equivalent payment services could be immediately and effectively handled by another Payment System in the State.
       
   5. 3.5. Whether any cross-border activities are involved, including the number of involved countries and the total volume of processed Transfer Orders.
       
   6. 3.6. The estimated number of Participant Persons of the RPS.
       
   7. 3.7. Whether such RPS is linked to any Designated Systems or any Payment System that is licensed or regulated by other Regulatory Authorities in the State.
       
4. In general, the higher the estimated aggregate value or number of Transfer Orders, the more likely an RPS is material to the financial system of the State and of significant public interest. The number of linkages of an RPS to another Designated System is an important factor that the Central Bank will consider when making a designation decision given the contagion risk to the financial system such linkage could bring.
    
5. Apart from the above factors, the Central Bank will also consider other factors, for example, in the case of a card payment system, among others, the number of cards issued, the number of card acceptance points. The Central Bank will take a holistic approach in considering these factors, as they complement each other in providing different criteria for assessing the significance of an RPS.
    
6. The above-mentioned factors are intended to identify an RPS whose proper functioning is material to the monetary or financial stability of the State, or that should be designated, having regard to matters of significant public interest or public order. During the designation process, should the need arise, the Central Bank will discuss with the SO and/or SI of the relevant RPS so as to understand the design and features of the system and assess whether it fulfills the criteria of a Systemically Important Financial Infrastructure System.
    

¹ Detailed regulatory requirements of SVF are set out in the SVF Regulation