AMENDMENTS TO THE MANUAL OF REGULATIONS FOR BANKS AND MANUAL OF REGULATIONS FOR NON-BANK FINANCIAL INSTITUTIONS

Portion of the

Circular

Title

MORB Section/

Subsections

MORNBFI

Section

Philippine and Foreign Currency
and

Notes

X950

4950Q/

4650S/

4650P/

4650N

Definition of

Terms

Definition of Terms

X950.1

4950Q.1

Chapter I

Treatment and disposition of

counterfeit Philippine and foreign
currency notes and coins

X950.2

4950Q.2

Chapter II

Reproduction and/or use of

facsimiles of legal tender
Philippine currency notes

X950.3

4950Q.3

Chapter III

Reproduction and/or use of

facsimiles of legal tender
Philippine currency coins

X950.4

4950Q.4

Chapter IV

Clean note and coin policy

X950.5

–

Chapter V

Replacement
and redemption of legal tender Philippine currency

notes and coins considered
mutilated or
unfit for circulation

X950.6

4950Q.6

Chapter VI

Treatment and disposition of

Philippine currency notes and coins
called in for replacement

X950.7

4950Q.7

Chapter VII

Penalties

X950.8

4950Q.8

Portion of the

Circular

Title

New Subsection/

Appendices

2nd  par

Report on Cross-border Financial Position

X192.13

Item 2

Report on Cross-Border Financial Positions

App. 6

Annex A

Guidelines on the Completion of the Report
on
Cross-Border Financial Positions

App. 106

Portion of the

Circular

Title

Appendices

Attachment

Framework
for Dealing with Domestic

Systemically Important Banks

App. 6

App. 107

App. Q–3

App. Q-62

Portion of the

Circular

Title

New Appendix

Attachment

Europay, Mastercard
and Visa (EMV)

Implementation Guidelines

App. 108

Portion of the

Circular

Title

New Section/

Subsections

Introduction

Personal Equity and Retirement
Account

(PERA) Market Participants and PERA

Investment Products.

X960

4960Q

4460N

Section 1

Applicability

X960.1

4960Q.1

Section 2

Eligibility Criteria

X960.2

4960Q.2

Section 3

Qualifications/Accreditation Requirements

X960.3

4960Q.3

Section 4

Application for qualification/ accreditation

X960.4

4960Q.4

Section 5

Security for the faithful performance
of administrators

X960.5

4960Q.5

Section 6

Grounds for suspension or revocation of qualification/accreditation of administrator, investment manager
or custodian.

X960.6

4960Q.6

Section 7

Penalty

X960.7

4960Q.7

Section 8

Reportorial Requirements

X960.8

4960Q.8

Circular

No.

Circular Reference

MORB/MORNBFI
Sections/Subsections/

Subsection Item/Appendices

826

App.Q-46b

App.Q-46

855

4306Q.1 – Item “h”

4306Q.1 – Item “i”

857

Part   9 
 Banks   and   Q–
Regulations

X1001                               4403S

X1001.1 – X1001.2           4403S.1 – 4403S.2

X1002                               4401P

X1002.1-X1002.5             4401P.1 – 4401P.2

X1003                               4402P

X1003.1-X1003.2             4402P.1 – 4402P.5

41001Q                            4403P

41001Q.1 – 41001.Q.2    4403P.1 – 4403P.2

41002Q                            4701N

41002Q.1 – 41002Q.5     4701N.1 – 4701N.2

41003Q                            4702N

41003Q.1 – 41003Q.2     4702N.1
– 4702N.5

4401S                               4703N

4401S.1 – 4401S.2           4703N.1
– 4703N.2

4402S                              App. 110

4402S.1 – 4402S.5          App.Q-04

Circular No.

Sections/Subsections

823

X181.2

824

X233.9

830

X253.1, X405.5, 4235Q, 4405Q.5

832

X253.1, X405.5, 4235Q, 4405Q.5

844

X172

Memorandum No.

Sections/Subsections

002

X111.4

003

X108.4 App. 94a

006

X192.2, X257, X269.6, X269.8, X302, X306, X338, App.

18, App. 89

007

X190.6

009

X191.2, App. 6, App. 77

010

App. 6

014

X901.1, App. 88, 4901Q.1, App. 51

015

App. 6

017

App. 6

019

App. 6, App. Q-3

020

App. 6, App. Q-3

021

X954

023

X233.9

024

App. 6

025

App. 6

026

App. 6

031

X192.2, x257, X269.6, X269.8, X302, X306, X338, App.

18, App. 89

032

App. 6

034

X233.9

035

App. 6

039

X192.2, X257, X269.6, X269.8, X302, X306, X338, App.

18, App. 89

044

App. 6

045

X960, App. 109, 4960Q, App. Q-63

046

App. 6

1. Item I of Section 1397

Real Estate Loon Limit. Total real estate loans of UB/KBs, excluding Items “a” to “d”

below, shall not exceed
twenty percent (20%) of the total loan portfolio, net of interbank
loans:

xxx xxx xxx

2. Item 1.d. of 1397

Loans to the extent collateralized by non-risk assets
under existing regulations.
xxx xxx xxx

3. Item 2 of Section 1397

Real Estate
Stress Test
(REST) Limits. A prudential limit is set for real estate
exposures

and other real estate property of UBs/KBs. Real estate exposures shall refer to:

a. Real estate loans (RELs),
which shall
consist of:

(1) Residential real estate loans to individual households for occupancy; and

(2) Commercial real estate loans, which shall
refer to loans granted to the following:

(a) individuals;

(b) land developers/
construction companies; and

(c) other borrowers, such as

(i) real estate brokers; (ii) real estate lessors;

(iii) property management companies;

(iv) holding companies; and

(v) others, including other corporate borrowers;

for purposes
of financing real estate activities;

b. Investments
in debt securities issued by land developers/construction companies and
other corporate borrowers, such as real estate brokers, real estate lessors,
property management companies and holding companies, for purposes
of financing real estate
activities; and

c. Investments
in equity securities issued
by land developers/construction companies and other corporate borrowers, such as real estate brokers,
real estate lessors and property management companies,
for purposes of financing real estate activities. Equity securities issued by holding companies
are likewise covered,
if proceeds from the issue shall be/has been invested by the holding company in its subsidiary corporation/s that
is/are engaged
in real estate activities.

Real estate exposures shall not include loans and investments
in debt and equity securities for construction of highways,
streets, bridges, tunnels, railways, and other infrastructure for public
use.

xxx xxx xxx

4. Section 2397

Sec. 2397
Limits on Real
Estate Exposures and Other Real
Estate Property of TBs.

A prudential limit is set for
real estate exposures as defined under Item “2” Section 1397,
and other
real estate property of TBs. Other real estate
property shall include those recorded under Real and Other Properties Acquired and Non-Current
Assets Held for
Sale. For this purpose,
a stress test will be undertaken on a TB’s REEs and other real
estate property
under an assumed write-off rate of twenty
five percent (25%).

xxx xxx xxx

1 TBs that are not subsidiaries of UBs and KBs.

5. Section 2172

Sec. 2172 Marketing, Sale and Servicing of Microinsurance Products by Thrift

Banks. In order to better serve microfinance clients pursuant
to the financial inclusion

thrust of National Strategy and Regulatory Framework for Microinsurance,
a TB,
including its authorized branch/es, extension office/s and other banking offices (OBOs), can present, market and sell microinsurance
products as defined under the Insurance
Commission’s Memorandum Circular (lMC) No. 1-2010x, provided that the microinsurance product is duly approved
by the Insurance Commission.

The presentation, marketing and sale of microinsurance
products by TBs has been
determined to be a necessary and
complementary component of
the primary business of

TBs considering the relationship
of
the latter with their microfinance clients. For this
purpose, the Monetary Board has defined that for TBs, microinsurance
products as defined under IMC No. 9-2006xx  and 1-2010xxx  shall serve as a “financial product of an
allied undertaking” under
Section 20 of the General Banking Law.

xxx xxx xxx

5. Bank’s
license from the Insurance Commission as a microinsurance agent or broker, as may be applicablexxxx.

6. Certification from the bank president xxx xxx
xxx xxx

(Circular
No. 683 dated 23 February
2010, M-2011-015 dated 18 March 2011)

—————-

x Dated 29 January
2010 xx  Dated 25 October 2006
xxx  Dated 29 January
2010

xxxx  To act as a microinsurance agent
of an authorized insurance provider, a bank needs to acquire the appropriate license from the lC. The requirements for such application consist of: (i) attendance in

prescribed microinsurance training
course and passing
the qualifying examination at the end of the

course; and (ii) amending a bank’s articles
of incorporation (AOl). In view of the latter requirement,
applicant  banks  shall  amend  their  AOl  by  including  a  secondary
 purpose
 of
 acting
 as
 a
microinsurance agent,
and shall submit simultaneously the amended
AOI to the appropriate BSP office and the lC. (See lC Memo Circular
No. 6-2011 dated 15 February 2011)

6. Subsection 2361.8

§ 2361.8
Marketing, sale
and servicing of microinsurance products by thrift banks.

A TB including its authorized branch/es, extension office/s and OBOs shall comply with

Sec. 2172 for the presentation, marketing and sale of micro insurance products.

7. Subsection 3361.8

§ 3361.8 Marketing, sale and servicing of microinsurance
products by rural and
cooperative banks.
An RB/coop banks including its authorized branch/es, extension office/s and OBOs shall comply
with Sec. 3172 for the presentation, marketing and sale

of micro insurance
products.

8. Subsections X806Q.2.i/4806Q.2.i

§
X806.2.i/4806Q.2.i Fund/Wire transfer. Because of the risk xxx

xxx xxx xxx

(4) Whenever
possible, manually initiated fund transfer (MIFT) instructions should
not be the primary delivery method. Every effort shall be made to provide client with an
electronic banking solution. However,
where MIFT is utilized, the following validation
procedures shall apply:

(i)            
Prior to the bank accepting from a customer a manually
initiated funds transfer request, the customer
must execute and sign an agreement
which preferably is part of the
 account  opening  documentation,
 wherein  are
 outlined
 the  manual
 instruction

procedures with related security
procedures including customer agreement to accept responsibility for fraudulent or erroneous instructions provided the bank has complied
with
the stated security procedures.

(ii) It is mandatory that written MIFT instructions are signature verified. In addition, one

(1) of the following primary security procedures
must be applied: a recorded callback to

the customer to confirm the transaction instructions, or testword arrangement/ verification. The callback or test word requirement may be substituted by any of the following validity checks: use of a controlled PIN or other pre-established code;
sequential numbering control of messages; pre-established verifiable forms; same as prior transmissions; standing/pre-defined instructions; or
value for value transactions.

(iii) It 
is  mandatory that faxed MIFT instructions are signature verified and the fax

machine be located in a secured environment with limited and controlled staff access which permits
visual monitoring. If monitoring is not possible, the equipment must be
secured or programmed to receive messages into a password protected memory.

Faxed MIFT transactions
below a certain threshold (approved by the President/Country Manager (for branches of foreign banks) or Business Risk Manager) may be processed with the mandatory procedure described above and an enhanced security procedure
such as (a) a recorded callback to the customer
to confirm the
transaction  instructions
 and/or
 (b)  test
 word  arrangement/verification,  and/or  (c)
utilization of secured forms that incorporate verifiable security
procedures such as watermarks or codes, and/or (d) transmission encryption.

(iv) Telephone callback numbers
and contacts must be securely controlled. The
confirmation callback is to be recorded and made to the signatory/(ies) of the customer’s

individual account(s).
For
commercial and company accounts the callback will be made to the signatory/(ies) of the account or, if so authorized, another person designated by
the
customer in the MIFT agreement. The party called is to be documented on the
instructions. The callback must be made by someone other than (a) the person
receiving the original instructions and (b) effecting the signature verification.

xxx xxx xxx

Subsection

Title

X119.4

Public issuance of unsecured subordinated debt

X119.5

Private or negotiated issuance of unsecured subordinated debt

X119.9

Accounting treatment

X126.5

Issuance
of redeemable shares: conditions; certification and report;

sanctions

X151.2

Prerequisites for the grant of authority
to establish a
branch

X190.4

Disclosure   requirement 
 in 
 the   notes 
 to 
 the   audited 
 financial statements

X192.9

Publication/Posting of balance sheet

X256.5

Guidelines in calculating and reporting to the Bangko Sentral the required reserves
on deposit substitutes evidenced
by repurchase

agreements covering government securities

X268.3

Approval/Renewal
of the line

X301.6

Large exposures and credit risk concentrations

X303.1

Definition of terms

X1628.3

Capital treatment of investments
in CLNs

App. 16

Implementing  Guidelines
 of  the
 Countryside  Financial
 Institutions

Enhancement program

App. 46

Guidelines  to  Incorporate
 Market  Risk  in
 the  Risk-Based  Capital

Adequacy Framework

App. 46b

Instructions for  Accomplishing the
 Report  on
 Computation of  the

Adjusted Risk-Based Capital Adequacy Ratio Covering Combined Credit Risk and Market Risk (For Universal Banks and Commercial
Banks With Expanded Derivatives Authority)

App. 46c

Instructions for  Accomplishing the
 Report  on
 Computation of  the

Adjusted Risk-Based
Capital Adequacy
Ratio  Covering Combined

Credit Risk and Market Risk (For Universal Banks and Commercial

Banks  with  Expanded
 Derivatives  Authority  but
 Without
 Options

Transactions)

App. 46d

Instructions for  Accomplishing the
 Report  on
 Computation of  the

Adjusted Risk-Based Capital Adequacy Ratio Covering Combined
Credit Risk and Market Risk (For Universal Banks and Commercial
Banks Without Expanded
Derivatives Authority)

App. 55

Small and Medium Enterprise Unified Lending Opportunities
for National Growth Bank Accreditation Application for Rural and Thrift
Banks Eligibility and Documentary Requirements

App. 56a

Accounting  Guidelines
 on  the
 Sale  of
 Non-Performing  Assets  to

Special Purpose
Vehicles and to Qualified Individuals for Housing

Under “The Special Purpose
Vehicle Act of 2002”

App. 63

Implementation Plans Under the New International Capital Standards as
 Contained  in  the
 Basel  Committee  on
 Banking
 Supervision

Document International Convergence of Capital Measurement and

Capital Standards

App. 63b

Risk-Based
Capital Adequacy
Framework for the Philippine Banking

System

App. 63b-1

Guidelines on the Capital Treatment of Banks’ Holdings of Republic
of
the Philippines Global Bonds
Paired with Warrants

App. 63b-2

Guidelines on the Use of the Standardized Approach in Computing

the Capital Charge for Operational Risks

App. 63d

Risk-Based  Capital  Adequacy  Framework  for
 the  Banks
 on  the

Definition of Qualifying Capital Instruments