The Dubai International Financial Centre (DIFC) today announced that it has signed a Memorandum of Understanding (MoU) with the Central Bank of the United Arab Emirates (CBUAE) under which the latter becomes the lead regulator for Real-time Automated Payments in DIFC (RAPID).
RAPID is a DIFC initiative to provide a real-time gross settlement (RTGS) payment systems infrastructure from within the DIFC to financial institutions operating within the centre and throughout the wider region.
HE Sultan Bin Nasser Al-Suwaidi, Governor of the CBUAE added: “As a pioneering system that will greatly benefit those doing business, RAPID looks set to revolutionise payment methods at the region’s leading financial centre. The CBUAE is committed to ensuring the reliability and integrity of all financial products and services available within the region and it is with great pleasure that we enter into this strategic alliance to actively ensure that RAPID complies with all of the regulations placed upon it.” Dr Omar Bin Sulaiman, Governor of the DIFC said: “By establishing RAPID, the DIFC is once again reaffirming its commitment to providing a comprehensive world-class financial infrastructure to encourage the development of the financial sector in the Middle East. As the world’s fastest growing financial centre and a hub for finance in the region, the DIFC recognises its responsibility to provide the latest, most innovative products and services to drive the growth of the banking and finance industry.
We are delighted that the CBUAE will govern the payment systems implemented by RAPID and we look forward to the positive impact that RAPID will have on business in the DIFC and the region. We also look forward to signing MoUs with other Central Banks.” As part of the agreement, the CBUAE becomes the lead regulator for the payment systems implemented at RAPID and has ultimate responsibility to ensure that RAPID complies with the Core Principles for Systemically Important Payment Systems (CPSIPS) as issued by the Bank for International Settlements (BIS).
As the lead regulator of RAPID, the CBUAE’s overall responsibility is to ensure that RAPID’s payment systems and the regulatory regime for RAPID comply with CPSIPS. This will be undertaken by an initial and periodic assessment of RAPID against the CPSIPS criteria and other international best practices.
DIFC will undertake all steps to establish and maintain RAPID legally and commercially. The DIFC will have the responsibility for establishing and maintaining appropriate governance powers and structures in compliance with CPSIPS and other best practices, so as to ensure that the RAPID has sufficient independence and clarity in its role and structure to conform with CPSIPS and other international best practices.
In addition, the CBUAE will undertake such other regulatory steps as appear reasonable and necessary to regulate RAPID, including, without limitation, periodic reporting by RAPID to the CBUAE; supervision of RAPID by the CBUAE by means of periodic meetings with RAPID management; and field examinations where deemed desirable by CBUAE. CBUAE and DIFC coordinate contacts with foreign Central Banks, including those where RAPID settles the currencies of those foreign Central Banks.