Section 4Sec./Art. 4

Definition of Terms. - For the purpose of this Act, the following terms shall refer to:

(a) Bangko Sentral the Bangko Sentral ng Pilipinas established under Republic Act No. 7653;

(b) Clearing the process of transmitting, reconciling, and in some cases, confirming payment orders prior to settlement, and the establishment of final payment obligations for settlement;

(c) Designated payment system the payment system that has been designated as such by the Bangko Sentral pursuant to this Act and its implementing rules and regulations;

(d) Director - any member of the board of directors of a participant to the payment system, or a person considered as such under Bangko Sentral regulations;

(e) End-user - any person who originally initiates the instruction to pay or the ultimate receiver of funds in a payment system;

(f) Fund any unit of value that forms the consideration or object of transactions;

(g) Issuer any person who provides the means or the instrument to hold or transfer funds;

(h) Manager - any person of recognized competence in payment system designated by the Bangko Sentral to manage the operations of the operator of a designated payment system as provided under Section 17 hereof. For this purpose, personnel of the Bangko Sentral may be designated as manager;

(i) Monetary Board - the Monetary Board of the Bangko Sentral;

(j) Netting - an agreed offsetting of obligations by participants of payment systems;

(k) Officer any person who is an employee holding a management position in any of the participants to the payment system, or a person considered as such under Bangko Sentral regulations;

(l) Operator any person who provides clearing or settlement services in a payment system, or defines, prescribes, designs, controls or maintains the operational framework for the system;

(m) Participant the operator, issuer, service provider, or any person involved in the payment system other than the end-user;

(n) Payment instrument - any instrument, whether tangible or intangible, that enables a person to transfer funds;

(o) Payment order an order or message requesting the transfer of funds to the order of the payee;

(p) Payment system the set of payment instruments, processes, procedures and participants that ensures the circulation of money or movement of funds;

(q) Payment System Management Body - the entity organized by participants of the designated payment system for the purpose of self-regulation;

(r) Service provider - an entity that provides process arrangements, technology or infrastructure to operators of a payment system;

(s) Settlement an act that discharges obligations in respect of fund transfers between two (2) or more parties; and

(t) Systemic risk the risk that the failure of one (1) participant in a payment system, or in financial markets generally, to meet its required obligations will cause other participants or financial institutions to be unable to meet their obligations, including settlement obligations in a payment system, when due: Provided, That, such failure could threaten the stability of the system or financial markets.