MORNBFI Vol. 1 - Planters Development Bank

§§ 4611Q.6 - 4625Q.209.12.31only after six (6) months from lapse of theimplementation of the sanction, providedthe QB has satisfactorily addressed all theBSP concerns.(As amended by Circular No. 668 dated 02 October 2009)Secs. 4612Q - 4624Q (Reserved)Sec. 4625Q (2008 - 4603Q.14) Forwardand Swap TransactionsStatement of policy. It is the policy ofthe BSP to support the deepening of thePhilippine financial markets. In line withthis policy, customers may, thru FXforwards, hedge their market risks arisingfrom FX obligations and/or exposures:Provided, That forward sale of FX(deliverable and non-deliverable) may onlybe used when the underlying transaction iseligible for servicing by the banking systemunder FX Manual, as amended. Customersmay, likewise, cover their fundingrequirements thru FX swaps.QBs may only engage in FXforwards and swap transactions withcustomers if the latter is hedging marketrisk or covering funding requirements.There shall be no double/multiplehedging such that at any given point intime, the total notional amount of theFX derivatives transaction/s shall notexceed the amount of the underlying FXobligation/exposure.The customer shall no longer beallowed to buy FX from the bankingsystem for FX obligations/exposures thatare fully covered by deliverable FXforwards and FX swaps.The following guidelines, as well asminimum documentary requirements,shall cover FX forward and swaptransactions involving the Philippine pesobetween authorized dealer QBs and theircustomers.(As amended by Circular No. 591 dated 27 December 2007)§ 4625Q.1 (Reserved)§ 4625Q.2 (2008 - 4603Q.15) Definitionof termsa. Customers shall refer to:(1) resident banks (other than KBs andUBs) and non-bank BSP-supervised entities(NBBSEs) not authorized to engage in FXforwards and swaps as dealers;(2) resident non-bank entities; and(3) non-residents, both banks andnon-banks.b. Foreign exchange obligation shallrefer to an actual commitment to repatriateor pay to a non-resident or any AAB aspecific amount of foreign currency on apre-agreed date.c. Foreign exchange exposure shallrefer to an FX risk arising from an existingcommitment which will lead to an actualpayment of FX to, or receipt of FX assetsfrom, non-residents or any AAB based onverifiable documents on deal date. FX risksarising from BSP-registered foreigninvestments without specific repatriationdates are considered FX exposures.d. Resident shall refer to -(1) An individual citizen of thePhilippines residing therein; or(2) An individual who is not a citizenof the Philippines but is permanentlyresiding therein; or(3) A corporation or other juridicalperson organized under the laws of thePhilippines; or(4) A branch, subsidiary, affiliate,extension office or any other unit ofcorporations or juridical persons which areorganized under the laws of any countryand operating in the Philippines, exceptoffshore banking units (OBUs).e. Non-resident shall refer to anindividual, a corporation or other juridicalperson not included in the definition ofresident.f. Foreign exchange swap shall referto a transaction involving the actualexchange of two (2) currencies (principalamount only) on a specific date at a rateQ Regulations Manual of Regulations for Non-Bank Financial InstitutionsPart VI - Page 6b