• Bank risks assessed

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    BSP requires reports on securities licenses

    The Bangko Sentral ng Pilipinas (BSP) has issued a new regulation requiring banks to submit full reports on their securities dealings and the corresponding licenses granted them by the Securities and Exchange Commission, the Bureau of Treasury and other regulatory authorities.

    The latest move by the Monetary Board sets a tighter watch on banks’ underwriting, brokering, dealing and transfer agency functions.

    Nestor Espenilla Jr., deputy governor for Supervision and Examination Sector of the central bank, said the new regulation will enhance the central bank’s risk-based assessment of the banking industry.

    “This will enable the BSP to more comprehensively track the securities market business activities of banks,” he said.

    Last year, a report by First Metro Investment Corp. showed that banks handled P185 billion worth of commercial papers and long-term certificates of deposit, twice that of the value recorded in 2013. Corporate bonds issued, which banks also handled, doubled to P166.5 billion.

    The BSP said that the reporting initiative underscores the importance of the licensing function to the management of risks that may be faced by banks from their securities operations and to the protection of investments made by their customers.

    “Understanding and managing these risks are essential to fostering financial stability, which is a key policy objective of the BSP,” it said.

    Besides the list of licenses, the monetary authority said banks also need to submit their roster of personnel authorized to perform underwriting functions and to act as securities salespersons or associated persons.

    The list should also be accompanied by the bank president’s certification that the listed personnel are duly licensed to carry out securities operations under relevant laws.

    The BSP noted that commercial banks and other banks have played increasing roles in the securities market.

    It said that with the introduction of universal banks in the early 1980s, the Philippines allows banks to combine investment banking and securities activities with the traditional commercial banking function.

    Although they are not required to report their licenses to the said activities, banks still need to secure appropriate licenses or accreditation for their securities operations from agencies such as the SEC and the Bureau of the Treasury, it concluded.

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