Article 10 of the Saudi Payments and Payment Services Law
المادة 10 من نظام المدفوعات وخدماتها
Sets four elements the rules of an important payment system must include, among them when a payment order becomes final, enforcing against collateral, and managing members' default.
Official text (Arabic)
This article has not been amended since the law was issued.
يجب أن تشتمل القواعد الخاصة بــنظام المدفوعات المهم على الآتي:
1- الوقت الذي يصبح فيه أمر المدفوعات الذي أنشأه عضو معين نهائيّاً، والوقت الذي يخضع فيه لنهائية التسوية، بما في ذلك الحالات التي يكون فيها تنفيذ أمر المدفوعات من خلال عدة نظم.
2- القواعد التي تحدد الإجراءات اللازمة لضمان حماية ترتيبات المقاصة وسريانها وإلزاميتها في الحالات التي يتعثر فيها مشغل نظام المدفوعات المهم أو أحد الأعضاء فيه.
3- القواعد الخاصة بالتنفيذ على الضمانات من قِبَل مشغل نظام المدفوعات المهم أو العضو.
4- القواعد التي تسمح لنظام المدفوعات المهم بإدارة تعثر الأعضاء، وأن تشمل -على سبيل المثال لا الحصر- الحالات التي يُعّد فيها العضو متعثراً سواءٌ ماليّاً أو تشغيليّاً، والإجراءات التي يمكن لمشغل نظام المدفوعات المهم اتخاذها عند تعثر أحد الأعضاء.
This is the official Arabic wording, the only legally binding version. We do not translate the law itself; the explanation below is ours. Official source: Bureau of Experts at the Council of Ministers
Article 10 explained in plain English
After Article 9 required the operator of an important payment system to set special rules, this article sets the minimum content those rules must include:
- When finality occurs: when a payment order created by a particular member becomes final and when it is subject to settlement finality, including cases where the order is executed through several systems.
- Protecting clearing: the procedures that ensure clearing arrangements are protected and remain in force and binding if the operator of the important system or one of its members defaults.
- Collateral: the rules for enforcing against collateral by the operator or a member.
- Default management: rules that allow the system to manage the default of members, including, as examples and not a closed list, the cases in which a member is considered financially or operationally in default, and the procedures the operator may take when a member defaults.
The practical benefit is that these rules let the parties know in advance when an operation becomes final and what happens if a participant is unable to perform. Their terms are understood under Article 1: settlement finality is the time at which a payment order becomes binding and effective and cannot be cancelled, withdrawn or amended by its issuer or anyone acting for him, and collateral is cash or assets convertible into cash provided to secure rights and obligations.
Article 11 follows, imposing disclosure and notification obligations on members that are linked to bankruptcy procedures.
Practical example
A member of an important payment system was unable to meet its obligations on time. The operator refers to the system's rules to determine whether the member is considered in default, what procedures it may take, and how to enforce against the collateral the member provided, while clearing arrangements remain protected and in force.
Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.
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Frequently asked questions about Article 10 of the Saudi Payments and Payment Services Law
What happens if a member of an important payment system defaults?
The rules of the important system must include provisions that allow member default to be managed, including the cases in which a member is considered financially or operationally in default and the procedures the operator may take.
Do clearing arrangements remain in force if a member defaults?
The rules must include procedures to ensure clearing arrangements are protected and remain in force and binding if the operator or one of its members defaults.
Who determines when a payment order becomes final in an important system?
The rules of the important payment system, which must state the time at which the order becomes final and is subject to settlement finality.
More articles on Systemically Important Payment System and Settlement Finality
- Article 1
Defines the key terms of the Payments and Payment Services Law, such as payment systems and services, payment order, member, customer, consumer, collateral and settlement finality.
يقصد بالكلمات والمصطلحات الآتية -أينما وردت في هذا النظام- المعاني الموضحة أمام كل منها، ما لم يقتضِ السياق غير ذلك: النظام: نظام المدفوعات وخدماتها. البنك المر
- Article 6
Provides that final payment orders, settlement operations, clearing arrangements, default management arrangements and collateral are binding and effective and cannot be amended, cancelled or invalidated.
تعد أوامر المدفوعات النهائية وعمليات التسوية وترتيبات المقاصة وترتيبات إدارة التعثر والضمان؛ ملزمة،ً ونافذة، وغير قابلة للتعديل أو الإلغاء أو الإبطال.
- Article 7
Makes the Central Bank the regulator, supervisor and overseer of payment systems and services, and lists thirteen specific powers.
يتولى البنك المركزي التنظيم والإشراف والرقابة على نظم المدفوعات ومشغليها، وخدمات المدفوعات ومقدميها، وفقاً لأحكام النظام وما تحدده اللوائح. وله على وجه خاص الآت
- Article 9
Requires the operator of a payment system classified as "important" to work, from the date it is notified, under special rules it sets for this purpose as the regulations specify.
يلتزم مشغل نظام المدفوعات الذي يصنف بأنه نظام مدفوعات مهم، من تاريخ إشعاره بذلك؛ بالعمل وفق قواعد خاصة بـ (نظام المدفوعات المهم) يضعها لهذا الغرض، بحسب ما تحدده
- Article 11
Requires a member of an important payment system to disclose its memberships when bankruptcy or judicial deposit procedures are opened for it, and to notify the operator of what it knows about other members.
يلتزم أي عضو في نظام مدفوعات مهم بالآتي: 1- الإفصاح للبنك ولمشغل نظام المدفوعات عن أي نظم مدفوعات مهمة يكون عضواً فيها، وذلك عند قيد أو افتتاح أي من إجراءات الإ
The texts are reproduced from the official website of the Bureau of Experts at the Council of Ministers for reference; where they differ, the officially published Arabic text prevails. This content is not legal advice.