MORNBFI Vol. 1 - Planters Development Bank

§§ 4611Q.2 - 4611Q.309.12.31application for additional derivativesauthority/ies accompanied by;(1) A copy of the board resolutionapproving the application for a specific typeof derivatives authority;(2) A notarized certification signedjointly by the president, treasurer, orequivalent trust officer and complianceofficer of the applicant QB stating that theQB complies with all the requirements forthe authority being applied for specified inSubsec. 4611Q.2; and(3) A list of the types of derivativesand underlying reference the QB intendsto engage in, including the followinginformation for each derivatives class ortype:(a) Target customers for suchderivatives;(b) The capacity in which the QBintends to engage in such derivatives;(c) Description of each type ofderivatives and underlying reference withwhich it will deal;(d) Analysis of the risks involved intransacting in each type of derivatives;(e) Procedures/methodologies that theQB will implement to measure, monitor(including risk management reports) andcontrol the risks inherent in the type ofderivatives;(f) Relevant accounting guidelines,including pro-forma accounting entries;(g) Analysis of any actual or potentiallegal/regulatory restrictions; and(h) Process flow chart, from dealinitiation to risk reporting, indicating thedepartments and personnel involved inidentified processes.(4) The BSP will not accept applicationslacking any of the above-statedrequirements. The BSP, however, mayrequire additional documents to aid itsevaluation of the application. By virtue ofthe application, the applicant automaticallyauthorizes the BSP to conduct an on-siteevaluation of the applicant’s riskmanagement capabilities, if this is deemednecessary.(5) Payment of the following nonrefundableprocessing fee shall be madeupon approval or denial of the QB’sapplication:AmountType 2 Authority P 50,000.00Type 3 Authority 25,000.00Type 4 Authority 25,000.00(6) A QB whose application foradditional derivatives authority/ies or anupgrade thereof (e.g., from Type 3 to Type2 Authority) has been denied cannot submita new application for additional derivativesauthorities until after six (6) months fromreceipt of denial. The same rule applies fora QB whose authorities have been limitedor downgraded.(7) A QB that holds an additionalderivatives authority may apply for additionalderivatives authorities (e.g., currentlyholding Type 3 Authority who wish to applyfor Type 4 Authority) or an upgrade thereofonly after the lapse of six (6) months fromthe grant of the previous additionalderivatives authority.(As amended by Circular No. 668 dated 02 October 2009)§ 4611Q.3 (2008 - 4603Q.3) Intragrouptransactions. All derivativestransactions between a QB and any of itssubsidiaries and affiliates shall comply withminimum risk management standards forrelated-party transactions outlined inAppendix Q-15 as part of the QB’s internalcontrol procedures. The BSP expects QBsto establish internal reporting andmonitoring system for derivatives activitiesfor related-party transactions. Failure tocomply with minimum standards shall be aground for citing non-compliance withprovisions under Subsecs. 4611Q.1 and4611Q.2 without prejudice to other BSPrules and regulations such as those relatedQ Regulations Manual of Regulations for Non-Bank Financial InstitutionsPart VI - Page 6