Question

To ensure system-wide regulatory compliance and prevent fraudulent double-financing of the same trade invoice across multiple platforms or traditional banks, under which statute is a TReDS platform authorized, and how is registration recorded?

Q: Answer-To ensure system-wide regulatory compliance and prevent fraudulent double-financing of the same trad...

TReDS platforms are set up as electronic payment systems and must obtain operational authorization from the RBI under Section 102 read with Section 18 of the Payment and Settlement Systems PSS Act, 2007. Furthermore, under the Factoring Regulation Act, assignment of receivables creation of an FU must be registered with the CERSAI registry to create a public record and eliminate the possibility of an unscrupulous business double-discounting the same invoice with another bank outside the platform.

A Authorized under the Companies Act, 2013; registered with the Registrar of Companies (RoC)

B Authorized under the Factoring Regulation Act, 2011; registered with the Central Registry of Securitisation Asset Reconstruction and Security Interest (CERSAI)

C Authorized under the PMLA, 2002; registered with the Financial Intelligence Unit (FIU)

D Authorized under the Payment and Settlement Systems (PSS) Act, 2007; and factoring transactions are reported to CERSAI

E Authorized under the Banking Regulation Act, 1949; registered with the Insolvency and Bankruptcy Board of India (IBBI)

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To ensure system-wide regulatory compliance and prevent fraudulent double-financing of the same trade invoice across multiple platforms or traditional banks, under which statute is a TReDS platform authorized, and how is registration recorded?

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