MORNBFI Vol. 1 - Planters Development Bank

APP. Q-2908.12.31c. money market instruments; andd. peso time deposits with a minimumtenor of ninety (90) days may be coveredby FX forward contracts subject to thepresentation of the original BSRD on orbefore deal date. However, for Item"2.2.a" above, original BSRD or BSRDLetter-Advice, together with the broker’ssales invoice, shall be presented on orbefore maturity date of the FX forwardcontract, which date coincides with thesettlement date of the PSE transaction.Sales proceeds of BSP-registeredinvestments in shares of stock that are notlisted in the PSE may be covered by adeliverable FX forward contract only ifdetermined to be outstanding as of the dealdate for the contract and payable on aspecific future date as may be indicated inthe Contract To Sell/Deed of AbsoluteSale and subject to the samedocumentary requirements underCircular No. 388.B. FORWARD SALE OF FX TO COVEREXPOSURES– DELIVERABLE ANDNON-DELIVERABLE1. TRADE (DELIVERABLE AND NON-DELIVERABLE)1.1 Under LCa. Copy of LC opened; andb. Proforma Invoice, or SalesContract/Purchase Order1.2 Under DA/OA, Documents AgainstPayment (DP) or Direct Remittance (DR)Any of the following where deliveryor shipment shall be made not later thanone (1) year from deal date:a. Sales Contractb. Confirmed Purchase Orderc. Accepted Proforma Invoiced. Shipment/Import Advice of theSupplierIn addition to the above requirements,the QB shall require the customer to submita Letter of Undertaking that:(i) At maturity of the forward contract,it shall comply with the documentationrequirements on the sale of FX for tradetransactions under Circular-Letter dated24 January 2002, as amended; and(ii) No double hedging has beenobtained by the customer for the coveredtransactions.2. NON-TRADE (NON-DELIVERABLE)The outstanding balance of BSPregisteredforeign investments withoutspecific repatriation date, appearing in thecovering BSRD may only be covered byan NDF contract, based on its market/book value on deal date, subject to priorBSP approval and if already with BSRDpresentation of the covering BSRD andthe proof that the investment still exists(e.g., stock certificate, or broker’s buyinvoice, or confirmation of sale, orcertificate of investment in moneymarket instruments, or certificate ofpeso time deposits). Hedging forpermanently assigned capital ofPhilippine branches of foreign banks/firms is not allowed.C. FORWARD PURCHASE OF FXSuch FX forward contracts shall besubject to the QB’s “Know YourCustomer” policy and existing regulationson anti-money laudering. In addition,counterparties must be limited to thosethat are manifestly eligible to engage inFX forwards as part of the normal courseof their operations and which satisfy theQB’s suitability and eligibility rules forsuch transactions.D. FX SWAP TRANSACTIONS1. FX SALE (first leg)/FORWARD FXPURCHASE (second leg)The same minimum documentaryrequirements for sale of FX under BSPQ Regulations Manual of Regulations for Non-Bank Financial InstitutionsAppendix Q-29 - Page 2