New PSSF Law to make Dubai a regional hub for payment processes

H H Shaikh Mohammad Bin Rashid Al Maktoum, the Vice President and Prime Minister of UAE and Ruler of Dubai have enacted the new Payment System Settlement Finality (PSSF) Law by the Dubai International Financial Center (DIFC).

The law establishes a legal foundation to build regional transaction processing hub in the DIFC, aimed to offer payment systems and other ancillary services. The law is aimed at creating a legal foundation, meant to make Dubai the regional hub for processing payment transactions with adequate protection.

It draws inspiration from best international practices in international jurisdictions. The motivation behind the European Union’s (EU) Settlement Finality Directive, for instance, is to reduce “systemic risk” inherent in payment and securities settlement systems, while minimizing disruptions caused due to bankruptcy.

The law forms a part of comprehensive infrastructure that DIFC is creating to catalyze the development of financial services industry in the region, said Omar Bin Sulaiman, DIFC governor.

The PSSF law will support Real-time Automated Payments in DIFC. This new service will offer transaction processing services within DIFC to banks and their customers, both in financial center and in the wider region.

The law aims to promote maintenance of an efficient financial system in the DIFC, and avoid considerable damage to DIFC system from failure of a participant in the payment system. The law will act as a market building measure and boost confidence.

Posted on 10/8/2009

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