MORNBFI Vol. 1 - Planters Development Bank

§§ 4101Q.6 - 4102Q.108.12.31the director/s and/or officer/s concerned tothe sanctions provided under Sec. 4199Q.(Circular No. 636 dated 17 December 2008)§ 4101Q.7 (2008 - 4655Q) Applicabilityof rules governing universal banks to quasibanks.In case of conflict between rulesapplicable to banks with universal bankingauthority and those applicable to QBs inactivities where they perform the samefunctions, the rules governing banks withuniversal banking authority shall prevail.B. ESTABLISHMENT ANDORGANIZATIONSec. 4102Q Statement of Policy. It is thepolicy of the BSP to promote thedevelopment of the domestic financialmarket so as to foster a sound, efficient andinclusive financial system fully supportiveof sustainable economic growth. Towardsthis end, the grant of authority to engage inquasi-banking functions to IHs and financecompanies shall be allowed subject to thefollowing conditions:a. That quasi-banking activities shall beundertaken by the institution concerned topursue its core business, i.e., underwritingof securities of other corporations and of thegovernment or its instrumentalities,participating as soliciting dealer or sellinggroup member in tender offers, block sales,or exchange offering of securities, anddealing in options, rights or warrants relatingto securities and such other powers whicha dealer may exercise under the SecuritiesRegulation Code (SRC), in the case of IHs,and discounting or factoring commercialpapers or accounts receivable, or by buyingand selling contracts, leases, chattelmortgages (CHMs), or other evidences ofindebtedness, or by leasing of motorvehicles, heavy equipment and industrialmachinery, business and office machinesand equipment, appliances and othermovable property, or granting business andconsumer loans, in the case of financecompanies;b. That the institution concerned shallfully inform investors of the nature of a depositsubstitute instrument, e.g., that it is not coveredby the Philippine Deposit InsuranceCorporation (PDIC), that pre-terminationthereof is subject to penalty, where applicable,and such other material risks involved ininvesting in such instrument; andc. That the institution concerned shallconduct effective investor suitability testingprocedures.(Circular No. 557 dated 12 January 2007)§ 4102Q.1 Preconditions for theexercise of quasi-banking functions. Noperson or entity shall engage in quasibankingfunctions without authority fromthe BSP. Only a duly incorporated IH andfinance company may undertake or performquasi-banking functions as defined inSection 4101Q. An institution securing BSPauthority to engage in quasi-bankingfunctions must meet the followingrequirements:a. It must have complied with theminimum adjusted capital accounts of atleast P300.0 million or such amounts asmay be required by the Monetary Board inthe future;b. It has generally complied withapplicable laws, rules and regulations,orders or instructions of appropriateauthority, including the Monetary Board and/or BSP Management where applicable;c. Its accounting records, systems andprocedures as well as internal controlsystems are satisfactorily maintained;d. It does not have float itemsoutstanding for more than sixty (60) calendardays in the “Due From/To Head Office/Branches/Offices” accounts exceeding onepercent (1%) of the total resources as of endof preceding month;e. It has no past due obligation withany FI as of date of application;Q Regulations Manual of Regulations for Non-Bank Financial InstitutionsPart I - Page 6