MORNBFI Vol. 1 - Planters Development Bank

§ 4235Q.1208.12.31being sold on a without recourse basis, suchas but not limited to:(i) issuer and its financial condition;(ii) term and maturity date;(iii) applicable interest rate and itscomputation;(iv) tax features (whether taxable, taxpaid or tax-exempt);(v) risk factors and investmentconsiderations;(vi) liquidity feature of the instrument:(aa) procedures for selling the security inthe secondary market (e.g., OTC or exchange);(bb) authorized selling agents; and(cc) minimum selling lots.(vii) disposition of the security:(aa) registry (address and contactnumbers);(bb) functions of the registry; and(cc) pertinent registry rules andprocedures.(viii) collecting and paying agent of theinterest and principal; and(ix) other pertinent terms andconditions of the security and if possible, acopy of the prospectus or information sheetof the security.(c) Informed the client that pursuantto Subsecs. 4235Q.5 and 4101Q.4:(i) Securities sold under repos shallbe physically delivered, if certificated, to aBSP accredited custodian that is mutuallyacceptable to the client and the QB, or bymeans of book-entry transfer to the appropriatesecurities account of the BSP accreditedcustodian in a registry for said securities, ifimmobilized or dematerialized; and(ii) Securities sold on a withoutrecourse basis are required to be deliveredphysically to the purchaser, or to hisdesignated custodian duly accredited by theBSP, if certificated, or by means of bookentrytransfer to the appropriate securitiesaccount of the purchaser or his designatedcustodian in a registry for said securities ifimmobilized or dematerialized.(d) Clearly stated to the client that:(i) The QB does not guarantee thepayment of the security sold on a “withoutrecourse basis” and in the event of defaultby the issuer, the sole credit risk shall beborne by the client; and(ii) The QB is not performing anyadvisory or fiduciary function.(3) Report to the appropriate departmentof the SES any undocumented repo withinseventy-two (72) hours from knowledge ofsuch transactions.c. Treatment as deposit substitutesAll sales of government securities,commercial papers and other negotiable andnon-negotiable securities or instruments thatare not documented in accordance withexisting BSP regulations shall be deemed tobe deposit substitutes subject to regularreserves.d. Certification. The submissiondeadline for the required certification fromthe CEO/officer of equivalent rank of the QBshall initially be 1 February 2005 using theformat in Appendix Q-36-a. Thereafter, therequired succeeding certification shall besubmitted within five (5) banking days fromend of reference semester using the formatin Appendix Q-36.e. Sanctions. The Monetary Board may,at its evaluation and discretion, impose anyor all of the following sanctions to a QB orthe director/s or officer/s found to beresponsible for repos covering governmentsecurities, commercial papers and othernegotiable and non-negotiable securities orinstruments that are not documented inaccordance with existing BSP regulations:(1) Fine of up to P30,000 a day to theconcerned entity for each violation from thedate the violation was committed up to thedate it was corrected;(2) Suspension of interbank clearingprivileges/immediate exclusion fromManual of Regulations for Non-Bank Financial InstitutionsQ RegulationsPart II - Page 5