Title
Amendment to BSP Trust Rules on Reserves
Law
Bsp Memorandum
Decision Date
Oct 1, 1997
The BSP Memorandum, effective October 1, 1997, amends the Trust Rules to require financial intermediaries to maintain a 10% reserve against peso-denominated common trust funds and Trust and Other Fiduciary Accounts, with additional liquidity reserves of 6% and 5% imposed in subsequent months.

Reserve Requirements Against Trust and Other Fiduciary Accounts (TOFA) Others

  • Financial intermediaries must maintain a 10% reserve against TOFA classified as "Others," in addition to the basic security deposit.
  • The categories exempted from this reserve requirement include: a. Accounts held under administration b. Bond issues under deed of trust or mortgage c. Custodianship and safekeeping d. Depository/reorganization e. Employees' benefit plans under trust f. Escrow accounts g. Personal trusts (testamentary or living trusts) h. Executorship i. Guardianship j. Life insurance trusts k. Pre-need plans (institutional/individual)
  • Similar to the common trust funds, a 6% liquidity reserve is imposed beginning October 15, 1997, and later reduced to 5% on November 15, 1997.
  • These liquidity reserves may also be held in short-term market-yielding government securities purchased directly from BSP-Treasury.
  • The required reserves for TOFA "Others" must be provided from the respective funds themselves.

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