Tuesday, 4th February 2025
International Group requirements for electronic trading system providers
These requirements are for electronic trading system providers. They form the generic specifications for electronic trading system providers seeking International Group Approval.
These are applicable for all system providers that fall outside the requirements for the ‘streamlined approach’ or ‘deemed approval’.*
- The system must be able to accomplish a transfer of title, rights, and liabilities (endorsement as a matter of law).
- There must be a signature provision whereby the parties agree that an electronic signature is a valid signature.
- A mechanism is necessary whereby parties must agree not to dispute that the e-bill is a bill of lading.
- A mechanism is necessary whereby users can sue and be sued.
- The system must ensure that treaties, conventions, and national laws which ordinarily apply to a paper bill of lading are applicable as if the e-bill were a paper bill.
- The operator/system provider must accept liability in case of system failure.
- The system must allow for clausing, accomplishment, and rejection of the e-bill.
- There must be sufficient evidence of the terms of the contract of carriage.
- The system must expressly exclude application of the Contracts (Rights of Third Parties) Act of 1999.
- The operator or system provider must carry adequate limits of liability in their insurance to cover liabilities arising from system fault or failure of any nature.
* The Group has introduced a streamlined approach to approval for systems that are limited to the use of e-bills subject to laws that recognise their validity as equivalent to paper bills (‘compliant e-bills’). For details of the streamlined approach, see the FAQs here, Q7.
Further, paperless trading systems will be ‘deemed approved’, if i), the system permits compliant e-bills only; and ii) the system is reliable and is evidenced as such. The requirements for ‘deemed approval’ are set out fully in the January 2025 circular.
