Law No. 133/2013, dated 29.04.2013 ''On Payment System''

Type: Law
Approved by: Parlament
Number: 133
Date: 29.04.2013
Enter into force: 29.05.2013
Published in: Official Journal
on: 14.05.2013
Category: Other
Department: Not Defined
The Law ‘On the Payment System” seeks to promote the security, stability and efficiency of the national payment system in Albania including: a) Payment Systems; b) Security Settlement Systems; c) Clearing Houses/settlement agents; d) Payments instruments and the other important components of the payment system. The Law defines the basic principles and authorizes the Bank of Albania to regulate through subsidiary legislation (in cooperation with the FSA when the respective competences are interweaving, as in the case the securities) the licensing, regulation and oversight of systems. Besides the market liberalization, the law enriches the Albanian legal framework with a special protection regime for the above-mentioned systems due to the implications they have on financial stability. Specifically, Chapter III of the Law provides for the protection of the payments-orders against the five principal threats in relation to insolvency proceedings of one of the participants in the system. Another important moment of the law, which constitutes a novelty for the national legislation, is the regulation of financial collateral arrangements and the immediate realization of financial collateral pledged. These provisions of the Law are applicable for all financial collateral arrangements that meet the following criteria: a) the agreement shall be concluded between legal persons, where at least one of the parties is the Republic of Albania, the Bank of Albania, a foreign central bank, a bank, a financial institution, a foreign institution similar with banks and financial institutions, a settlement agent, an operator, or a domestic or international public authority; b) the financial transaction must be ensured with: 1) cash’ (Article 5, letter “d”, as an account or money market deposits); or 2) financial instruments' (Article 5, letter “f”); and c) the agreement must be in written or in electronic form (for example: in the case of book-entry registration, or any other similar forms applicable by law (it may include a court case deciding on the existence of liability through evidence obtained through witnesses or separately evaluated on its own initiative, as is the case of common law countries). In case of default of contractual obligations the Law facilitates procedures for realization/execution of financial collateral pledged recognizing the right to financial institutions, in the role of collateral taker (the physical possession of collateral is not a criteria) - to realize immediately the collateral pursuant to the provisions of the Law, without being required to notify or seek the assistance of any public authority, such as the courts. As a result of the insolvency of the other party to the agreement, the protection of the financial institutions from financial losses serves to limit the contaminating effects to the financial system.