Issuers of Electronic Payment Instruments Regulations, 2017

The Issuers of Electronic Payment Instruments Regulations, 2017 are subsidiary legislation made by the Central Bank of Lesotho (CBL) under the National Payment Systems Act, 2014. They operationalise the Act in respect of electronic payment instruments and are the principal instrument under which payment service providers and issuers of electronic money, including mobile money operators, are licensed and supervised in Lesotho. The Regulations require that any payment service provider or e-money/mobile-money issuer be licensed by the CBL before commencing operations. They set out the categories of issuers, the application and licensing process, and the entry requirements that applicants must satisfy, including corporate form, fit-and-proper standards for owners, directors and senior management, governance and risk-management arrangements, and operational and technological capacity. A core prudential and consumer-protection requirement is the safeguarding of customer funds: issuers of electronic money must maintain customer funds in a trust or equivalent protected account, fully backing the value of electronic money issued, so that customers can redeem their balances at any time and the funds are insulated from the issuer's own creditors. The Regulations impose ongoing obligations on licensed issuers, including the establishment of adequate operational arrangements and a high level of system availability to maintain public confidence, compliance with anti-money-laundering and counter-terrorist-financing requirements and customer due diligence (with KYC tiers and transaction limits), interoperability and agent-management expectations, consumer-protection and disclosure obligations, and regular reporting to the CBL. The CBL supervises licensed issuers, may impose conditions, and may take corrective or enforcement action, including suspension or revocation of a licence. Sitting beneath the umbrella National Payment Systems Act, the Regulations are the operative licensing instrument for e-money and mobile money in Lesotho and remain in force.

1. 1Require payment service providers and issuers of electronic payment instruments (e-money/mobile money) to be licensed by the CBL before operating
2. 2Set categories of issuers, application/licensing process, corporate-form, fit-and-proper, governance and operational requirements
3. 3Require safeguarding of customer funds in a trust/protected account fully backing electronic money issued
4. 4Require adequate operational arrangements and high system availability to maintain public confidence
5. 5Impose AML/CFT and customer due diligence (KYC tiers and transaction limits), consumer-protection and reporting obligations
6. 6Confer CBL supervision and enforcement, including suspension or revocation of licences