(NAR) VOL. 28 NO. 3/ JULY - SEPTEMBER 2017
The list of reports classified as Primary and Secondary are provided in the attached Annex A[*].
Bank Type
Primary Reports
Secondary Reports
Universal/Commercial Banks (U/KBs)
P 3,000
P600
Thrift Banks (TBs)
1,500
300
Rural Banks/Coop Banks (RCBs)
450
150
In the event that a compliant report is received after it has been considered unsubmitted, the applicable penalty shall be based on the number of days provided in Column C of Table 2. This will be the case even if the actual number of banking days delayed is less than the constant number of days provided in said Column C[1].
(Column A)
Reporting Frequency
(Column B)
defined # of banking days after submission deadline to be considered “Unsubmitted”
(Column C)
# of days for penalty computation of reports considered “Unsubmitted”
(A)
(B) = (A multiplied by e)
Weekly
7
21
Monthly
30
90
Quarterly
Semestral
Annual
Event-Based*
*Refers to reports that are not due under a regular periodicity since their required submission is reckoned from the occurrence of an event/incident or upon knowledge thereof.
Based on the sample computation, the bank is considered a habitual violator since it has incurred more than 100 demerit points within the calendar year.
Report Category
Total
Primary
Secondary
A. Monetary penalties approved for imposition
P180,000
P30,000
B. Prescribed fine per applicable category based on Table 1
P3,000
P600
C. Number of demerit points (A/B)
60
50
110
Section 4. The pertinent portions in Appendix 6, as shown in Annex B[*], are amended to indicate the new requirement for their electronic submission.
Section/Subsection/ Appendix
Existing Phrase
New Phrase
Subsection X115.4
Late and/or erroneous reporting of all reports in compliance with the Basel III requirements shall be subject to penalties provided under Subsec. X192.2. Banks failing to submit the required reports within the prescribed deadline shall be subject to monetary penalties applicable for delayed reporting under existing regulations.
Erroneous/Delayed/ Erroneous and Delayed/ Unsubmitted reports relative to the Basel III requirements shall be subject to penalties provided under Subsec. x184.3.
Subsection X115.6 b.
However, late and/or erroneous reports shall be subject to penalties provided under Subsection X192.2. Banks failing to submit the required reports within the prescribed deadlines shall be subject to monetary penalties applicable for delayed reporting under existing regulations.
However, Erroneous/ Delayed/ Erroneous and Delayed/ Unsubmitted reports shall be subject to penalties provided under Subsection X184.3.
Subsection X126.2
Any willful delay in the submission of said report, a Category A-2 report, shall subject the bank to the corresponding fines for delayed reports in accordance with the provisions of Subsec. X192.2 to be reckoned on the day following the due date of submission until the correct report is submitted to the Bangko Sentral.
Any Delayed/ Unsubmitted report, a Category A-2 report, shall subject the bank to the corresponding penalties in accordance with Subsection x184.3.
Subsection 1176.3 ii.
For delayed sworn certification and/or LCR report. A bank shall be subject to the penalties for delayed submission of the sworn certification and/or LCR report in accordance with the provisions of Subsec. X192.2, to be reckoned on the day following the due date of submission until the certification and/or report is filed with the Bangko Sentral.
For Erroneous/ Delayed/ Erroneous and Delayed/ Unsubmitted sworn certification and/or LCR report. A bank shall be subject to the penalties for Erroneous/ Delayed/ Erroneous and Delayed/ Unsubmitted sworn certification and/or LCR report in accordance with the provisions of Subsec. X184.3.
Subsection X190.1
The reports and certifications of institutions concerned, schedules and attachments required under this Subsection shall be considered Category B reports, delayed submission of which shall be subject to the penalties under Subsec. X192.2b(1)b.
The reports and certifications of institutions concerned, schedules and attachments required under this Subsection shall be considered Category B reports, wherein Delayed/ Unsubmitted reports subject to the penalties under Subsec. X184.3.
Subsection X192.4
Moreover, final reports on crimes and losses with incomplete information as required under SES Form 6G shall be considered erroneous reports and the concerned bank shall be required to submit amended reports subject to penalties on late reporting for Category B reports under Subsec. X192.2;
Moreover, initial and/or final reports on crimes and losses as required under SES Form 6G that are considered Erroneous/ Delayed/ Erroneous and Delayed/ Unsubmitted shall be subject to the penalties for Category B reports under Subsection X184.3.
Subsection X192.18
Late and/or erroneous reporting of the said report shall be subject to penalties prescribed under Subsec. X192.2 for Category I reports.
Erroneous/Delayed/ Erroneous and Delayed/ Unsubmitted reports shall be subject to penalties prescribed under Subsec. X184.3 for Category B reports.
Subsection X341.15 (1) (b)
For delayed/amended re ports
A bank shall be subject to the fines for delayed/amended reports on compliance with the mandated credit allocation for agri-agra credit under R.A. No. 10000 in accordance with the provisions of Subsec. X192.2, to be reckoned on the day following the due date of submission until the proper report is filed with the BSP.
For Erroneous/ Delayed/ Erroneous and Delayed/ Unsubmitted reports
A bank shall be subject to the fines for Erroneous/ Delayed/ Erroneous and Delayed/ Unsubmitted reports on compliance with the mandated credit allocation for agri-agra credit under R.A. No. 10000 in accordance with the provisions of Subsec. x184.3.
Subsection X351.9
Late and/or erroneous reporting of said reports shall be subject to penalties prescribed for category A-2 report under Subsec. X192.2.
Erroneous/Delayed/ Erroneous and Delayed/ Unsubmitted reports shall be subject to penalties prescribed for category A-2 report under Subsec. X184.3.
Subsection X410.5
For purposes of imposing monetary penalties provided under Subsec. X192.2 for delayed submission of reports, the amendments to the Plan shall be considered as “Category A-3” report.
For purposes of imposing monetary penalties provided under Subsec. X184.3 for Delayed/ Unsubmitted reports, the amendments to the Plan shall be considered as “Category A-3” report.
Subsection X190.7 b.
Delayed submission of Annual Report. Sanctions in case of willful delay in the submission of Annual Report and the ARAC shall be in accordance with the provision under Subsec. X192.2.
Delayed/ Unsubmitted Annual Report. Sanctions in case of Delayed/ Unsubmitted Annual Report and the ARAC shall be in accordance with the provision under Subsec. X184.3.
Appendix 107
Late and/or erroneous reporting of the said report shall be subject to penalties prescribed under Subsec. X192.2 for Category A-1 reports, without prejudice to sanctions provided under Sections 35 and 37 of R.A. No. 7553 or The New Central Bank Act.
Erroneous/Delayed/ Erroneous and Delayed/ Unsubmitted reports shall be subject to penalties prescribed under Subsec. X184.3 for Category A-1 reports, without prejudice to sanctions provided under Sections 35 and 37 of R.A. No. 7553 or The New Central Bank Act.
§ X269.5 Rediscount/Lending rotes and liquidated damages. The rediscount rates for peso, dollar and yen loans shall be as follows:
Type of Credit
Maturity Date
a. Commercial Credits
180 days from date of rediscount but shall not go beyond the maturity date of the credit instrument
(1) Export Packing
(2) Trading
(3) Transport
(4) Quedan
(5) Export Bills (EBs)
At Sight
Fifteen (15) days from date of purchase
Usance EB
Term of draft but not to exceed sixty (60) days from shipment date
b. Production Credits
180 days from date of rediscount but shall not go beyond the maturity date of the promissory note (PN). Renewable, not to exceed 180 days.
c. Other Credits
180 days from date of rediscount but shall not go beyond the maturity date of the PN (renewable depending on the type of credit).
xxx.”
Rediscount Maturities
Rediscount Rates
Bangko Sentral overnight (O/N) lending rate plus term premium:
1-90 days
Bangko Sentral O/N Lending rate + 0.0625
91-180 days
Bangko Sentral O/N lending rate + 0.1250
“BALANCE SHEET ACCOUNTSb. FRP and Simplified FRP Schedules (FRP)
“Asset Accounts
“xxx xxx xxx
“4. Due from Other Banks
“xxx
“b. Non-Resident Banks - This refers to the balances of deposit accounts xxx xxx.
“The foreign currency amount maintained in the FCDU/EFCDU book shall be those held as asset cover for FCDU/EFCDU liabilities.
“(c) Resident Banks - Clearing and Settlement Account - This refers to debit balances of accounts maintained with other resident banks exclusively for the settlement of payment transactions pertaining to fund transfer services, check clearing, foreign exchange trades, security trades, security custody services, and other short-term payment transactions.
(1) Local currency - This refers to balances of accounts maintained for the settlement of short-term Peso-denominated payment transactions including interbank claims in places where there is no BSP clearing facility.
(2) Foreign currency - This refers to balances of accounts maintained for the settlement of short-term foreign-currency denominated payment transactions. It includes accounts with the franchise holder of the Philippine Domestic Dollar Transfer System (PDDTS) for clearing of checks and accounts with the designated settlement bank for the Domestic Renminbi (RMB) Transfer Service, among others.
“(d) Non-Resident Banks - Clearing and Settlement Account - This refers to debit balances of clearing and settlement accounts maintained with non-resident banks exclusively for the settlement of payment transactions pertaining to fund transfer services, check clearing, foreign exchange trades, security trades, security custody services, and other short-term payment transactions.
“5. Financial Assets Held for Trading (HFT)
“xxx.”
“Liability Accounts
“xxx xxx xxx
“4. Due to Other Banks
(a) Due to Resident Banks - Clearing and Settlement Accounts - This refers to credit balances of accounts maintained by other resident banks exclusively for settlement of payment transactions pertaining to fund transfer services, check clearing, foreign exchange trades, security trades, security custody services, and other short-term payment transactions.
(i) Local currency - This refers to credit balances of accounts maintained by other resident banks for settlement of short-term Peso-denominated payment transactions including interbank claims in places where there is no BSP clearing facility.
(ii) Foreign currency - This refers to credit balances of accounts maintained by other resident banks for the settlement of short-term foreign-currency denominated payment transactions.
“(b) Due to Non-Resident Banks - Working Capital - This refers to credit balances of deposit accounts maintained by non-resident x x x.
“Subsection X409.2/4409Q.2 Lending and investment disposition. x x x”Section 2. Subsections X411.4 /4411Q.4 of the MORB/MORNBFI are hereby amended to read as follows:
“When a trustee or fiduciary is granted discretionary powers in the investment disposition of trust or other fiduciary funds and unless otherwise specifically enumerated in the agreement or indenture and directed in writing by the client, court of competent jurisdiction or other competent authority, loans and investments of the fund shall be limited to:The specific directives required under this Subsection shall consist of the following information:
- Traditional deposit products of universal and commercial Banks in the Philippines with long-term credit rating of at least AA- or its equivalent by a third party credit assessment agency recognized by the Bangko Sentral;
- Evidences of indebtedness of the Republic of the Philippines and of the Bangko Sentral, and any other evidences of indebtedness or obligations where the servicing and repayment of which are fully guaranteed by the Republic of the Philippines or loans against such government securities;
- Loans fully guaranteed by the Republic of the Philippines as to the payment of principal and interest;
- Tradable securities issued by the government of a foreign country or any supranational entity with long-term credit rating of at least AA- or its equivalent by a third party credit assessment agency recognized by the Bangko Sentral;
- Loans fully secured by a hold-out on, assignment or pledge of deposits maintained either with the bank proper or other banks, or of deposit substitutes of the bank/institution, or of mortgage and chattel mortgage bonds issued by the trustee or fiduciary;
- Loans fully secured by real estate or chattels in accordance with Section X311/4311Q and Subsections X178.7/4178.7 and X304.1/4304Q.1; and
- Placements in the Bangko Sentral Term Deposit Facility (TDF) and the Overnight Deposit (ODF) subject to the applicable provisions of Section X601/X4601Q and Appendix 78a/Q-47a.[1]
(1) The transaction to be entered into;
(2) Name of the issuer or borrower;
(3) Amount involved; and
(4) Terms of the security, including collateral, if any.”
Trust Entities (TEs) with composite rating of at least “3” under the Revised Trust Rating System in the latest Bangko Sentral examination will not be subject to the investment limitations provided under this subsection.”
“Subsection X411.4/4411Q.4 Lending and investment disposition. x x x”Section 3. Reporting requirements for discretionary and non-discretionary accounts under Subsections X425.1/4425Q.1 of the MORB/MORNBFI are hereby amended to read as follows:
“When an investment manager is granted discretionary powers in the investment disposition of investment management funds and unless otherwise specifically enumerated in the agreement or indenture and directed in writing by the client, loans and investments of the fund shall be limited to:The specific directives required under this Subsection shall consist of the following information:
- Traditional deposit products of universal and commercial Banks in the Philippines with long-term credit rating of at least AA- or its equivalent by a third party credit assessment agency recognized by the Bangko Sentral;
- Evidences of indebtedness of the Republic of the Philippines and of the Bangko Sentral, and any other evidences of indebtedness or obligations where the servicing and repayment of which are fully guaranteed by the Republic of the Philippines or loans against such government securities;
- Evidences of indebtedness of the Republic of the Philippines and of the Bangko Sentral, and any other evidences of indebtedness or obligations where the servicing and repayment of which are fully guaranteed by the Republic of the Philippines or loans against such government securities;
- Tradable securities issued by the government of a foreign country or any supranational entity with long-term credit rating of at least AA- or its equivalent by a third party credit assessment agency recognized by the Bangko Sentral;
- Loans fully secured by a hold-out on, assignment or pledge of deposits maintained either with the bank proper or other banks, or of deposit substitutes of the bank/institution, or of mortgage and chattel mortgage bonds issued by the investment manager; and
- Loans fully secured by real estate or chattels in accordance with Section X311/4311Q and Subsection s X178.7/4178.7 and X304.1/4304Q.1.
(1) The transaction to be entered into;
(2) Name of the issuer or borrower;
(3) Amount involved; and
(4) Terms of the security, including collateral, if any.”
TEs with composite rating of at least “3” under the Revised Trust system in the latest Bangko Sentral examination will not be subject investment limitations provided under this subsection.”
“(a) Account opening process. XxxSection 5. Transitory Provision. The following provision shall be incorporated as a footnote to Subsections X409.2/4409Q.2 on “Lending and Investment Disposition of Trust and Other Fiduciary Business”, X411.4/4411Q.4 on “Lending and Investment Disposition of Investment Management Activities”, and X425.1/4425Q.1 on “Reports Required to Trustor, Beneficiary, Principal”, and Part III.A.2 Item (a) on “Account Opening Process” of Appendix 83/Q-48 of the MORB/MORNBFI:
xxx
Client Suitability Assessment (CSA)
xxx
Minimum Information Required for CSA
xxx
Investment policy statement
TE managing discretionary accounts shall have in place a method by which suitability of investment is determined based on the results of the CSA and formulated via an Investment policy statement (IPS). It shall communicate to prospective clients the results of the assessment, recommend the investment product/portfolio/strategy, and explain the reasons why, on the basis of the given information, its recommendation is to the best interest of the client as of a defined timeframe. The TE shall make a recommendation only after having reasonably determined that the proposed investment is suitable to the client's and/or beneficiary’s risk profile/tolerance, financial situation, investment experience, and investment objectives.
The IPS is a clear reference frame for investment decisions and must be based on the investment objectives and risk tolerance of the client. It must include, at a minimum, a description of the following:
i. Client’s risk tolerance;
ii. Investment and/or return objectives;
iii. Liquidity requirements;
iv. Investment horizon;
v. Investment strategy and rebalancing;
vi. Portfolio construction process, including asset allocation and security selection criteria;
vii. Investment restrictions - identifying any limitation which the client may have for the portfolio such as, but not limited to, single/group exposure limits, investment restrictions (e.g., prohibited investments), and client’s consent for taking losses; and
viii. Investment performance review - indicating proposed market benchmarks and the desired frequency of the performance review reporting.
A TE shall review the IPS of each client, offer suggestions on clarifying any necessary changes in the IPS, and discuss with the client various techniques and strategies to be used to meet the client’s investment goals. A TE shall have a mechanism in place to ensure that this review is done periodically and that only appropriate investments and investment strategies are included in a client’s portfolio and are aligned with the IPS.
For Unit Investment Trust Fund (UITF), the IPS is equivalent to the investment objective of the fund specifically stated in the Declaration of Trust.
Option of client for re-classification
xxx
For non-discretionary accounts, the TE shall observe the above requirements for every transaction allowing clients to invest in products/portfolio/strategy with a higher risk than those corresponding to their CSA profile results.
Frequency of CSA and IPS
xxx
(b) Identification of degree of discretion granted by client to the TE. This process involves the determination of the extent of discretion granted to the TE to manage the client’s portfolio.
(1) Discretionary. The TE has authority or discretion to invest the funds/property of the client in accordance with the parameters set forth by the client; and
(2) Non-discretionary. Investment activity of the TE is directed by the client or limited only to specific securities or properties and expressly stipulated in the agreement or upon written instruction of the client.
(c) Documentation. The trust, fiduciary or investment management relationship shall be formally established through a written legal document, such as the trust or investment management agreement. The engagement documents shall clearly specify the extent of fiduciary assignments/responsibilities of the TE and articulate the nature and limits of each party’s status as trustor/principal or trustee/agent. Policies and procedures shall provide that trust or investment management agreements are signed by the trust officer, or subordinate officer of the trust department, or in the case of UITF, branch managers/officers duly authorized by the board of directors.
The documentation process must also consider the following:
(1) The Agreement must conform to the requirements provided under Subsec. X409.1/4409Q.1 for trust and other fiduciary accounts and Subsec. X411.1/4411Q.1 for investment management accounts. In addition, the Agreement shall contain the following provisions:
(i) xxx
xxx
(2) The Agreement shall be in plain language understandable by the client and/or personnel of the TE responsible for explaining the contents of the agreement to the client.
(3) For complex investment products, such as financial derivatives instruments or those that use synthetic investment vehicles, the TE shall disclose to the client and require client's prior written conformity to the following:
(i) xxx
xxx
(4) In order to give a fair and adequate description of the investment service or financial instrument, the TE shall provide a clearly stated and easily understood Risk Disclosure Statement to its clients, which forms part of or attached to the trust, fiduciary or investment management agreement. The Risk Disclosure Statement shall contain, among other things, the following provisions:
(i) xxx
xxx
Additional risk disclosures may be provided as appropriate.
The TE must ensure that the trust, fiduciary and investment management agreements and documents have been reviewed and found to be legally in order.”
Date Filed
Issuance No.
Subject/Title
Adopted
03 July 2017
Circular Letter No. CL-2017-038
Approved Applications for New Banking Offices and Opened Banking Offices During the 1 st Quarter of 2017
22 June 2017
05 July 2017
Memorandum No. M-2017-020
Final Reportorial Template and Reporting Guidelines on the Reportorial Template on Repurchase (Repo) Agreements of Banks and Quasi-Banks (QBs)
28 June 2017
05 July 2017
Circular Letter No. CL-2017-038 (Corrected Copy)
Approved Applications for New Banking Offices and Opened Banking Offices During the 1 st Quarter of 2017
22 June 2017
13 July 2017
Circular Letter No. CL-2017-039
Lost Bangko Sentral registration Documents (BSRDs)
05 July 2017
13 July 2017
Circular Letter No. CL-2017-040
Publication/Posting of Balance Sheet (BS) and Consolidated Balance Sheet (CBS)
06 July 2017
13 July 2017
Circular Letter No. CL-2017-041
Publication/Posting of Statement of Condition and/or Consolidated Statement of Condition
06 July 2017
21 July 2017
Circular Letter No. CL-2017-042
Consolidation Between Cooperative Bank of Ilocos Norte and Ilocos Sur Cooperative Bank into a New Cooperative Bank to be Known as “Ilocos Consolidated Cooperative Bank”
07 July 2017
21 July 2017
Circular Letter No. CL-2017-043
Updates on the BSP Registry of Pawnshops, FXDs/MCs and/or RAs from 1 March – 30 June 2017
11 July 2017
21 July 2017
Circular Letter No. CL-2017-044
Rural Bank of Lupao, Inc. – Change of Corporate Name to ProFarmers Rural Banking Corporation
12 July 2017
21 July 2017
Memorandum No. M-2017-019
Supplemental Guidelines on BSP EMV Migration Requirement
09 June 2017
21 July 2017
Memorandum No. M-2017-021
Guidelines on the Electronic Submission of the Report on Repurchase Agreements of Banks/Quasi-Banks (REPO Report)
12 July 2017
21 July 2017
Memorandum No. M-2017-022
Inventory of New Design Series (NDS) Banknotes
12 July 2017
07 August 2017
Circular No. 967
Reportorial Requirements for Trust Entities
27 July 2017
07 August 2017
Memorandum No. M-2017-023
Reporting of Foreign Exchange Transactions Under Intercompany Netting Arrangements
26 July 2017
07 August 2017
Circular Letter No. CL-2017-045
Lost Bangko Sentral Registration Documents (BSRD)
27 July 2017
07 August 2017
Circular Letter No. CL-2017-046
Rural Bank of Calaca, Inc. – Change of Corporate Name to FBC First Bank of Calaca, Inc. (Rural Bank of Calaca)
21 July 2017
16 August 2017
Memorandum No. M-2017-024
Guidelines on Records Maintenance and Minimum Internal Control Standards
01 August 2017
16 August 2017
Circular No. 968
Extension of the Transitory Provision of Subsection 4511N.16 of MORNBFI
10 August 2017
22 August 2017
Circular Letter No. CL-2017-047
MB Resolution No. 1340 Dated 11 August 2017 Prohibition of the World Partners Ban (A Thrift Bank), Inc. From Doing Business in the Philippines
11 August 2017
22 August 2017
Circular Letter No. CL-2017-048
Rules on the Imposition of Administrative Sanctions Under Republic Act No. 9160, as Amended
(Note: Said Rules was also Filed by the Anti-Money Laundering Council on July 25, 2017)
07 August 2017
30 August 2017
Circular No. 969
Enhanced Corporate Governance Guidelines for BSP-Supervised Financial Institutions
22 August 2017
30 August 2017
Circular No. 970
Enhanced Corporate Governance for BSP-Supervised Financial Institutions Amending the Manual of Regulations for Non-Bank Financial Institutions
22 August 2017
30 August 2017
Circular No. 971
Guidelines on Risk Governance
22 August 2017
30 August 2017
Circular No. 972
Enhanced Guidelines in Strengthening Compliance Frameworks
22 August 2017
30 August 2017
Circular Letter No. CL-2017-049
Hua Nan Commercial Bank, Ltd. – Manila Branch – Establishment and Commencement of Operations
22 August 2017
11 September 2017
Circular Letter No. CL-2017-050
BPI Family Savings Bank, Inc. and BPI Capital Corporation – Surrender/ Revocation of Trust Licenses
29 August 2017
11 September 2017
Circular Letter No. CL-2017-051
Optimum Development Bank, Inc. – Change of Corporate Name to AllBank (A Thrift Bank), Inc.
31 August 2017
11 September 2017
Memorandum No. M-2017-025
Reminder on Compliance with Regulations Governing Fees on Retail Bank Products/Services and Dormant Deposit
25 August 2017
18 September 2017
Memorandum No. M-2017-026
Electronic Correspondences from the BPS-Supervision and Examination Sector (SES)
11 September 2017
18 September 2017
Circular Letter No. CL-2017-052
Maximum Savings Bank, Inc. – Change of Corporate Name
24 August 2017
18 September 2017
Implementing Rules and Regulations of Republic Act No. 10744 – The Credit Surety Fund Cooperative Act of 2015
20 June 2017
25 September 2017
Circular Letter No. CL-2017-053
Consolidation of Cooperative Bank of Misamis Oriental, Bukidnon Cooperative Bank and Cooperative Bank of Agusan Norte – Butuan City to be Known as Mindanao Consolidated Cooperative Bank
30 June 2017
25 September 2017
Circular Letter No. CL-2017-054
Lost Bangko Sentral Registration Document (BSRD)
15 September 2017
25 September 2017
Memorandum No. M-2017-027
Guidelines on the Electronic Submission of Reports Required from Trust Entities
11 September 2017
25 September 2017
Memorandum No. M-2017-028
Guidelines on the Electronic Submission of Prescribed Reports to the BSP-Supervision and Examination Sector (SES) Through the Supervisory Data Center (SDC)
11 September 2017
26 September 2017
Memorandum No. M-2017-029
Operating Schedule of BSP Offices on 21 September 2017
19 September 2017