Updates and Amendments to the Manual of Regulations for Banks and Non-Bank Financial Institutions Under BSP Circular No. 1189

The Monetary Board of the Bangko Sentral ng Pilipinas (“BSP”) approved several amendments to the Manual of Regulations for Banks (“MORB”) and Manual of Regulations for Non-Bank Financial Institutions (“MORNBFI”) that were updated as of 31 December 2021. The amendments encompass the incorporation of several amendments to provisions of the MORB and MORNBFI issued under various circulars and memoranda as issued by the BSP in 2021. A few salient amendments include:

• The addition to Section 902-N of the MORBNFI on Virtual Asset Service Providers (“VASP”) of the transitory provisions provided under Section 3 of Circular No. 1108 dated 26 January 2021. The provision states that VASPs as well as BSP-registered Virtual Currency Exchanges, currently operating without BSP approval, are required to apply for a Certificate of Authority not later than three (3) months from 16 February 2021. Upon submission, such entities will be allowed to operate unless instructed otherwise. Despite this update in the MORBNFI, it must be noted that the regular window for application for VASP licenses is currently suspended, as declared by the BSP in BSP Memorandum No. M-2022-035. As of the moment, only existing BSP Supervised Financial Institutions who wish to expand operations by offering VASP services and non-custodial VASPs who wish to offer safekeeping and/or custodial services, and provided that they have a Supervisory Assessment Framework composite rating of at least “stable,” may still apply for a VASP license.

• Section 622 of the MORB now includes a discussion on the policy on “Non-Deliverable Foreign Exchange Forward Contracts involving the Philippine Peso.” Peso Non-Deliverable Forwards refers to a forward foreign exchange contract involving the value of the Philippine peso against a foreign currency at a specified maturity date on an agreed notional amount.

The guidelines on Forward and Swap Transactions under Section 621-Q of the MORNBFI was deleted. Accordingly, the reference found under Appendix 7/T-4 of the MORB/MORNBFI is amended to update the reference to Section 94 of the FX Manual.