MORNBFI Vol. 1 - Planters Development Bank

§§ 4931Q.2 - 4931Q.508.12.31(b) power to govern the financial andoperating policies of the enterprise undera statute or an agreement;(c) power to appoint or remove themajority of the members of the board ofdirectors or equivalent governing body;(d) power to cast the majority votes atmeetings of the board of directors orequivalent governing body; or(e) any other arrangement similar toany of the above.h. Internal compliance procedures(1) The CRA must have the necessaryinternal procedures to prevent misuse orunauthorized disclosure of confidential/non-public information; and(2) The CRA must have rules andregulations that prevent insider trading andother conflict of interest situations.§ 4931Q.3 (2008 - 4657Q.3) Prequalificationrequirements. The applicationof a domestic CRA for BSP recognitionshall be submitted to the appropriatedepartment of the SES together with thefollowing information/documents:a. An undertaking(1) That the CRA shall comply withregulations, directives and instructionswhich the BSP or other regulatory agency/body may issue from time to time; and(2) That the CRA shall notify the BSPin writing of any material changes withinthe organization (i.e., changes inmanagement or organizational structure,rating personnel, modifications of itsrating practices, financial deterioration)that may affect its ability to providereliable and credible ratings.b. Other documents/information:(1) Brief history of the CRA, majorrating activities handled includinginformation on the name of the client, typeof instruments rated, size and year of issue;(2) Audited financial statements forthe past three (3) years and such otherinformation as the Monetary Board mayconsider necessary for selection purposes;(3) For new entrants, employment ofprofessional analytical staff with experiencein the credit rating business;(4) List of major stockholders/partners[owning at least ten percent (10%) of thevoting stocks of the CRA directly or alongwith relatives within the 1st degree ofconsanguinity or affinity];(5) List of directors, officers, membersof the rating committee and professionalanalytical staff of the CRA; including theirqualifications, experience related torating activities, directorship andshareholdings in the CRA and in othercompanies, if any;(6) List of subsidiaries and affiliatesincluding their line of business and thenature of interest of the CRA in thesecompanies;(7) Details of the denial of a previousrequest for recognition, if any (i.e.,application date, date of denial, reason fordenial, etc.); and(8) Details of all settled and pendinglitigations connected with the securitiesmarket against the CRA, its directors,officers, stockholders, members of therating committee and professionalanalytical staff, if any.§ 4931Q.4 (2008 - 4657Q.4) Inclusionin BSP list. The BSP will regularlycircularize to all banks and NBFIs anupdated list of recognized CRAs. The BSP,however, shall not be liable for any damageor loss that may arise from its recognitionof CRAs to be engaged by users.§ 4931Q.5 (2008 - 4657Q.5)Derecognition of credit rating agenciesa. Grounds for derecognition. CRAsmay be derecognized from the list of BSPrecognized CRAs under the followingcircumstances:Q Regulations Manual of Regulations for Non-Bank Financial InstitutionsPart IX - Page 6