(NAR) VOL. 18 NO. 1/JANUARY - MARCH 2007
“Section 4102Q. Preconditions for the Exercise of Quasi-Banking Functions. No person or entity shall engaged in quasi-banking functions without authority from the Bangko Sentral. Only a duly incorporated INVESTMENT HOUSE AND FINANCE COMPANY may undertake or perform quasi-banking functions as defined in Section 4101Q. An INSTITUTION securing BSP authority to engage in quasi-banking functions must meet the following requirements:
a. It must have complied with the minimum adjusted capital accounts of at least P300 million or such amounts as may be required by the Monetary Board in the future;
b. It has generally complied with applicable laws, rules and regulations, orders or instructions of appropriate authority, including the Monetary Board and/or BSP Management where applicable;
c. Its accounting records, systems and procedures as well as internal control systems are satisfactorily maintained;
d. It does not have float items outstanding for more than sixty (60) calendar days in the “Due From/To Head Office/Branches/Offices” accounts exceeding one percent (1%) of the total resources as of end of preceding month;
e. It has no past due obligation with any financial institution as of date of application;
f. The officers who will be in-charge of the QUASI-BANKING operations have actual experience of at least two (2) years in a bank or non-bank with quasi-banking functions (NBQBs) as in-charge (or at least as assistant-in-charge). The directors of the INSTITUTION, officer-in-charge of the QUASI-BANKING operations and the managerial staff must comply with the fit and proper rule prescribed under existing law/rules and regulations;
g. The INSTITUTION has elected at least two (2) independent directors and all its directors have attended the required seminar for directors of banks/ NBQBs conducted or accredited by the BSP.
h. It has not engaged in unsafe and unsound practices during the past six (6) months immediately preceding the date of application where applicable;
i. It must have in place a comprehensive risk management system approved by its board of directors appropriate to its operations characterized by a clear delineation of responsibility for risk management, adequate risk measurement systems, appropriately structured risk limits, effective internal control and complete, timely and efficient risk reporting systems. In this connection, a manual of operations and other related documents embodying the risk management system must be submitted to the appropriate supervising department at the time of application for authority and within thirty (30) days from updates.”
“Section 4103Q- Certificate of Authority from the Bangko Sentral. An INSTITUTION securing BSP’s Certificate of Authority to engage in quasi-banking functions shall file an application with the appropriate supervising and examining department of the BSP. The application shall be signed by the president or officer of equivalent rank OF THE INSTITUTION and shall be accompanied by the following documents.
a. Certified true copy of the resolution of the board of directors OF THE INSTITUTION authorizing the application.
b. A certification signed by the president or officer of equivalent rank that: (1) the institution has complied with all conditions/prerequisites for the grant of authority to engage in quasi-banking functions; (2) QUASI-BANKING FUNCTIONS SHALL BE PURSUED/UNDERTAKEN BY THE INSTITUTION IN THE FURTHERANCE OF ITS CORE BUSINESS, E.G., UNDERWRITING OF AND DEALING IN SECURITIES OF OTHER CORPORATIONS AND OF THE GOVERNMENT OR ITS INSTRUMENTALITIES, IN THE CASE OF INVESTMENT HOUSES, AND LEASING AND/OR DISCOUNTING/ FACTORING COMMERCIAL PAPERS OF ACCOUNTS RECEIVABLE, OR GRANTING BUSINESS AND CONSUMER LOANS, IN THE CASE OF FINANCE COMPANIES; (3) INVESTORS SHALL BE INFORMED THAT THEIR INVESTMENTS/PLACEMENTS SHALL NOT BE INSURED BY THE PHILIPPINE DEPOSIT INSURANCE CORPORATION (PDIC), AND THAT ANY PRETERMINATION THEREOF SHALL BE SUBJECT TO PENALTY, IF APPLICABLE, AS WELL AS ALL OTHER MATERIAL RISKS; AND (4) INVESTORS SHALL BE SUBJECTED TO EFFECTIVE INVESTOR SUITABILITY TESTING PROCEDURES;
c. An information sheet;
d. Bio-data signed under oath, of the members of the managerial staff who will undertake quasi-banking operations.
e. Borrowing-investment program for one (1) year, and annually thereafter on or before November 30, which should include at the minimum:
1) planned distribution of portfolio as to –a. underwriting;
b. commercial papers;
c. stocks and bonds;
d. government securities;
e. receivables financing, discounting and factoring;
f. leasing; and
g. direct loans;
2) expected sources of funds to support investment program classified as
toa. maturity: short, medium and long-term
b. interest rates; and
c. domestic or foreign sources whether institutional or personal.”