Cap. 592 Art. 8Certification of innovative technology arrangements.

(1) Any innovative technology arrangement which is referred to in the First Schedule, or in relation to which the

Authority has issued a written ruling on eligibility under article 3, may at any time be the subject of an application to the Authority for certification.

(2) The Authority may certify any innovative technology arrangement when it is satisfied that the general and the specific requirements of this article have been satisfied.

(3) The general requirements are intended to meet the standards of legality, integrity, transparency, compliance and accountability generally established for innovative technology arrangements by the Authority reflecting the principles of the MDIA Act and this Act, and confirmation that none of the circumstances referred to in article 29 of the MDIA Act arise, and shall be assessed by the Authority based on its own reviews of all persons involved, all documentation available and the software it may access as would any user thereof.

(4) The specific requirements shall establish to the satisfaction of the Authority that:

(a) the innovative technology arrangement is fit and proper for the purposes for which it declares in the application to have been established and having the qualities, attributes, features, behaviours or aspects also therein declared; and when owned or controlled by a legal organisation:

(i) any administrator of such organisation, if any, is a fit and proper person to carry out his functions as administrator; and

(ii) if there are shareholders in any legal organisation which owns or controls the innovative technology arrangement, any shareholder holding more than twenty-five per cent (25%) of the shares or ownership interests in the said legal organisation or who, through provisions of the statute, has special voting or other rights permitting him to exercise effective control over the activities of the legal organisation, (hereinafter referred to as a "qualifying shareholder") shall be a fit and proper person, the above being subject to the more detailed provisions of the Fourth Schedule and any rules or guidelines issued pursuant or in relation to it;

(b) the software comprising the innovative technology arrangement, or such parts of it as are designated in applicable rules or otherwise in writing by the Authority, has been reviewed by a registered systems auditor, or registered systems auditors, who are independent from all persons owning, administering, operating or otherwise involved in the innovative technology arrangement, and the Authority has been provided with positive assurance by the systems auditor, or when more than one, each systems auditor, in relation to the matter of audit and review on which he has been engaged.

The systems auditor shall confirm that the innovative technology arrangement meets reasonable standards with reference to -

(i) the specific purposes, qualities, features, attributes, behaviours or aspects of the innovative technology arrangement;

(ii) all authorisations or powers granted to -

(A) the Authority or other national ARRANGEMENTS AND SERVICES

competent authority, if any; or

(B) the technical administrator; or

(C) the innovative technology arrangement itself, exist as stated and operate as intended; and

(iii) compliance with any rules and regulations made under this Act and any guidelines issued by the Authority applicable to the particular type of innovative technology arrangement, as well as any conditions established by the Authority in the particular case.

The Authority may at its discretion, cumulatively or alternatively, require a high level review or audit on the characteristics of the innovative technology arrangement when, in the opinion of the Authority, the specific purposes, behaviours or aspects of the relevant innovative technology arrangement:

(i) need to be considered holistically in view of its complexity; or

(ii) are not susceptible for reasons acceptable to the Authority, to the review and assurance described above, and in such cases the level of the review or audit and the relative assurances shall be expressly stated in the certification and prominently reflected in the website of the applicant, if any, the innovative technology arrangement and in the Register of the Authority.

(c) the innovative technology arrangement has a registered technical administrator in office at all times, and who is able to demonstrate to the Authority the ability of the innovative technology arrangement to satisfy -

(i) all pre-requisites for the certification which may be granted to it under this Act;

(ii) its ability to meet standards on a continuing basis and to address critical matters, and how to address them, as are stated in guidelines, if any, by the Authority in the event they occur;

(iii) its ability to vary parameters or functionalities where the objective of the system is to address mandatory legal requirements which may reasonably be predicted to change over time; and

(iv) with reference to matters, if any, upon which -

(A) the technical administrator;

(B) the Authority or other national competent authorities; or

(C) any other designated person, may be given the discretion or may be required to intervene and which are addressed by the software, all authorisations or powers required to carry out such interventions exist and operate as intended;

(d) the innovative technology arrangement is in a position to -

(i) comply with and observe any innovative technology authorisation rules and regulations applicable to it, any guidelines issued by the Authority as well as any conditions established by the Authority in the particular case; and

(ii) carry out any obligations imposed upon it by applicable law, including those relating to the prevention of money laundering and the financing of terrorism, the protection of personal data, the respect of the rights of consumers and other mandatory laws; and

(iii) has in-built technology features, to enable the technical administrator to intervene in a transparent and effective manner in the event of -

(A) a material cause of loss to any user; or

(B) a material breach of law, so as to ensure that the cause of loss or breach of law is satisfactorily addressed to the best of his abilities and to ensure it does not occur or re-occur, and in case of unjustifiable failure by the technical administrator, on the intervention of the Authority;

(e) the specific purposes, qualities, features, attributes, limitations, conditions, terms of service and ARRANGEMENTS AND SERVICES

behaviours or aspects of the relevant innovative technology arrangements and on the basis of which a user is invited to participate in, rely on or use the innovative technology arrangement are stated in the English language in an easily accessible and intelligible format. On such matters as are stated, in case of conflict between the English language and the underlying code of the innovative technology arrangement, the English language shall prevail. Where the applicant wishes to use multiple languages for this purpose, in case of conflict between languages, the English language version shall prevail.

(5) In the case of -

(a) DLTs or other innovative technology arrangements which are in operation, or at a very advanced stage of development, on the date of the coming into force of this Act; and

(b) open, decentralised, public and permission-less DLTs, and other similar innovative technology arrangements, where compliance with one of the requirements stated in this article is not practicable within short time frames due to technical challenges as shall be confirmed by a systems auditor registered under this Act, if the Authority considers the circumstances of the case appropriate, the Authority may, on the basis of the recommendation of the said systems auditor and the agreement of the applicant identify -

(a) the issues on which there is non-compliance with the legal requirements stated in this article;

(b) the matters which need to be overcome for such issues to be addressed;

(c) the manner in which such issues may be addressed as would satisfy the Authority of compliance with this article; and

(d) the time frame within which the issues are to be addressed, and proceed to issue a certification of the said innovative technology arrangement conditionally upon compliance within the time frames agreed with the applicant and subject to the additional condition that a systems auditor who has been registered under this Act and who maintains such recognition at all relevant times issues a positive assurance that the necessary actions and modifications have been made to the innovative technology arrangement to achieve the agreed outcomes and compliance with this article. The condition shall be recorded in the certification.

(6) When the Authority proceeds to certify the innovative technology arrangement under this Act it shall enter its name in the Register of recognised innovative technology arrangements, under such category as it may determine.

(7) The innovative technology services providers referred to above shall be appointed by any person who is an applicant, developer or owner of the innovative technology arrangement or in case the innovative technology arrangement is held within a legal organisation, by the legal representative of the organisation.

(8) When an innovative technology arrangement is held within a legal organisation, whether with legal personality or not, the certification shall be made in the name of the legal organisation and where it does not qualify as a legal organisation, the Certificate shall be made out to the applicant, if so requested, and also to the technical administrator, who has been registered under this Act and who maintains such recognition at all relevant times, who has been engaged in respect to the innovative technology arrangement.