Payment and Settlement Systems Act 2005 · As enacted · Part II · Payment, Clearing and Settlement Systems and Money Services
21. Directives
Official English translation. Where it differs from the Sinhala or Tamil text, the Act itself says which text prevails.
Official translationFrom Department of Government Printing, unchanged
Where the Central Bank is of the opinion that—
a clearing house for a designated clearing and settlement system engages in or is about to engage in any act, omission or course of conduct ;
a participant is engaging in or is about to engage in any act, omission, or course of conduct with respect to its participation in the designated clearing and settlement system; or
the designated clearing and settlement system operates or is about to be operated in a manner, that results in or is likely to result in a risk to the financial system being inadequately controlled, the Central Bank may issue a directive in writing to the clearing house, requiring it within such time as the Central Bank considers necessary —
to cease or refrain from engaging in the act, omission or course of conduct or require the participants to cease or refrain from engaging in the act, omission or course of conduct ;
to perform such acts or have the participant perform such acts as in the opinion of the Central Bank are necessary to remedy the situation.
Where the Central Bank is of opinion in terms of subsection (1) that the risk to the financial system is being inadequately controlled, and it appears to the Central Bank that —
the clearing house fails to comply with a directive that has been issued to it in terms of subsection (1) ;
the designated clearing and settlement system does not have a clearing house located in Sri Lanka ; or
in the opinion of the Central Bank —
the risk to the financial system is being inadequately controlled due to an act, omission, or course of conduct of a participant with respect to its participation in the designated clearing and settlement system; and
the act, omission, or course of conduct does not comply with any agreement, rule, procedure, guideline or other documentation relating to the designated clearing and settlement system, the Central Bank may issue a directive in writing to any participant requiring it, within such time as the
Central Bank considers necessary,—
to cease or refrain from engaging in certain acts, omissions, or courses of conduct with respect to its participation in the designated clearing and settlement system; and
to perform such acts with respect to its participation as the Central Bank considers necessary to remedy the situation.
A directive under this section may be made in respect of any matter that is directly related to participation in the designated clearing and settlement system. A directive under this section may not be made in respect of—
the capital adequacy of a participant;
the management of its investments;
its corporate governance;
its relations with customers who are not themselves participants in the designated clearing and settlement system; or
its ownership structure.
A directive may require that the payment obligations that arises from clearing within the designated clearing and settlement system shall be settled through adjustments to the account or accounts of one or more of the participants at the
Central Bank.
A directive, if it so provides, shall be applicable to a designated clearing and settlement system that is established by or under any written law.
A directive issued under this section shall be communicated to the person to whom it is directed and shall be published in the Gazette. A directive so issued shall come into operation on the date it is issued.
A directive shall be binding on the person to whom it is issued.
Part III
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