QuestionsQuestions (BSP CIRCULAR NO. 145)
BSP Circular No. 145 was issued pursuant to Monetary Board Resolution No. 1035 dated August 13, 1997, requiring banks to develop and implement a compliance system and appoint/designate a compliance officer. The implementing rules were approved under Monetary Board Resolution No. 1249 dated September 24, 1997.
The compliance system must have: (1) a written compliance program approved by the Board of Directors; (2) a constructive working relationship with regulatory agencies; (3) a clear and open internal communication process to educate and address compliance matters; and (4) continuous monitoring and assessment of the compliance program.
It must enable the bank to identify relevant Philippine laws and regulations; analyze risks of non-compliance; and prioritize compliance risks (e.g., low, medium, high).
It should provide for periodic compliance testing using applicable legal and regulatory requirements. Testing frequency must be commensurate with identified risk levels—examples given: annual testing for low-risk, quarterly for medium-risk, and monthly for high-risk.
The program must provide for reporting of compliance findings to appropriate levels of management.
It must establish the responsibilities and duties of the compliance officer and other personnel (if any) involved in the compliance function.
A copy of the compliance program and the Board’s written approval must be submitted to the appropriate supervising and examining department of the Bangko Sentral within twenty (20) banking days from the date of approval.
It must be updated at least annually to incorporate changes in laws and regulations. Any changes must be approved by the bank’s Board and submitted to BSP within twenty (20) banking days from the date of approval.
Through the compliance officer, the bank may consult regulatory agencies for clarification on provisions of laws and regulations and/or discuss compliance findings. A dialogue may also be initiated for borderline issues.
Officers and staff must be trained on regulatory requirements through regular meetings, distribution of manuals, and dissemination of regulatory issuances.
The program should provide for periodic review of the compliance function to measure effectiveness; this may be carried out by the internal audit department. It may operate parallel to or as part of the bank’s internal control and auditing programs.
To oversee and coordinate implementation of the compliance system, including identification, monitoring, and controlling of compliance risk.
The appointment/designation requires prior approval of the Monetary Board, and the bio-data of the proposed compliance officer must be submitted to the appropriate supervising and examining department of BSP.
He should have the skills and expertise to provide appropriate guidance and direction to the bank on development, implementation, and maintenance of the compliance program.
An independent full-time compliance officer must be appointed for every commercial bank, and he must have a rank of at least a Vice-President.
Not necessarily. An incumbent senior officer may be designated concurrently as the compliance officer provided that the designation will not give rise to any conflict of interest situation.
Yes, the internal auditor may be designated as compliance officer, subject to the condition that his primary duty will be to act as compliance officer.
Banks are given two (2) months from the date of the circular within which to comply with the requirements.