Amendments to Regulations Governing Banks
- Subsection X234.6 of the MORB explicitly incorporates the prohibition on the sale, discounting, assignment, or negotiation of credit rights stemming from claims against BSP.
- The sub-account for ‘‘Reverse Repurchase Agreements with BSP - Sold to Clients’’ is removed from bank financial reporting packages to reflect the prohibition.
Prohibition on Sale and Negotiation of Credit Rights Arising from BSP Claims by Quasi-Banks
- Mirrors the prohibition for banks, applying it to quasi-banks under Subsection 4101Q.6 of the Manual of Regulations for Non-Bank Financial Institutions (MORNBFI).
- Quasi-banks are similarly barred from sale, discounting, assignment, or negotiation of credit rights from SDA placements and RR/P with the BSP.
- Violations are classified as less serious offenses, triggering sanctions under Section 4199Q of the MORNBFI against quasi-banks and the responsible directors or officers.
Amendments to Regulations Governing Quasi-Banks
- Subsection 4602Q.1 of the MORNBFI on Reverse Repurchase Agreements with BSP is amended to remove certain paragraphs pertaining to these transactions.
- From 1 July 2003, interest rates on reverse repurchase agreements with the BSP for quasi-banks must be inclusive of Value Added Tax (VAT).
- Pro-forma accounting entries relating to the sale of RR/P by quasi-banks to clients (Appendix Q-26 of the MORNBFI) are deleted to align with the prohibition.
Transitory Provision and Effective Date
- The regulations apply prospectively from the effective date of the circular.
- Sale agreements executed before the circular’s effectivity that do not comply with the new rules are allowed to remain valid until their pre-termination or maturity, whichever occurs earlier.
- The Circular takes effect 15 calendar days after publication in the Official Gazette or a newspaper of general circulation.