MORNBFI Vol. 1 - Planters Development Bank

§§ 4611Q.3 - 4611Q.609.12.31to corporate governance and unsafe andunsound banking practices.(As amended by Circular No. 668 dated 02 October 2009)§ 4611Q.4 (2008 - 4603Q.5) Accountingguidelines. A QB that engages in derivativesactivities must strictly account for suchtransactions in accordance with relevantPAS.(As amended by Circular No. 668 dated 02 October 2009)§ 4611Q.5 (2008 - 4603Q.6) Reportingrequirements. A QB engaged in anyderivatives transactions shall submit amonthly report on derivatives transactions/outstanding derivatives in accordance withthe format shown in Annex "A" of AppendixQ-16 within fifteen (15) banking days fromend of the reference month. The reports shallbe certified by the treasurer.(As amended by Circular No. 668 dated 02 October 2009)§ 4611Q.6 (2008 - 4603Q.7) Sanctionsa. Unauthorized transactionsSanctions prescribed under Sections36 and 37 of R.A. No. 7653 shall beimposed on any QB (including itsdirectors and officers) found to haveengaged in an unauthorized derivativesactivity.A QB undertaking unauthorizedderivatives activities may be consideredas conducting its business in an unsafeand unsound manner under Section 56 ofR.A. No. 8791.b. Delayed/Erroneous/InaccuratereportingQBs failing to submit the reportsrequired under Subsec. 4611Q.5 within theprescribed deadline shall be subject tomonetary penalties applicable for delayedreporting under existing regulations.Moreover, submission of incomplete,uncertified or improperly certified orotherwise erroneous reports shall beconsidered non-reporting, subject toapplicable penalties for amended/delayedreports. For purposes of imposing monetarypenalties, the reports shall be classifiedas a Category A-1 report. Habitual delayedor erroneous reporting may be a groundfor further sanction, including limitationof generally authorized activities and/oradditional authorities and/or suspensionof authority to engage in such derivativesactivities.c. Non-compliance with the provisionsof this Section, its Subsecsections andAppendices Q-15 and Q-16.Any QB found violating any of theprovision of Sec. 4111Q and its Subsectionsand/or Appendices Q-15 and Q-16 shall besanctioned with the penalties prescribedunder Sections 36 and 37 of R.A. No. 7653in accordance with the gravity/seriousnessof the offense taking into consideration thenumber of times the offense was committed,possible consequent losses on the clients,effect on the financial markets and otherrelevant factors.d. Curtailment of derivatives authorityThe BSP reserves the right to suspend,modify, downgrade, limit or revoke anyQB’s derivatives authority (including anyor all of those generally authorizedactivities) for prudential reasons as maybe evidenced by any or all of thefollowing:i. The QB is assigned a CAMELScomposite rating or componentManagement rating of lower than thatprescribed under Subsec. 4611Q.2 in themost recent regular examination.ii. The QB has not maintainedadequate risk management systems given thelevel and type of derivatives activities it hasengaged in as may be determined by the BSPin any on-site evaluation and confirmed bythe Monetary Board.iii. The Monetary Board has confirmedan SES finding that the QB has conductedbusiness in an unsafe and unsound manner.An erring QB may apply forreinstatement of its derivatives authorityManual of Regulations for Non-Bank Financial Institutions Q RegulationsPart VI - Page 6a