BSP has recently issued several regulatory updates for the institutions it supervises in the financial sector. These updates address regulatory relief measures for those impacted by pandemic, reputational risk management guidelines, operational risk and internal control measures, domestic systemically important bank (D-SIB) recovery plan guidelines, corporate governance guidelines, and amendments to the provisions of the Manal of Regulations for banks and non-banks. Additionally, at an April meeting of the Financial Sector Forum members (an inter-agency body for financial sector), it was decided that the existing regulations will be reviewed to harmonize baseline components and controls in the areas of customer onboarding and consumer protection across the financial sector.
The following are the key highlights of these regulatory updates:
- Guidelines on reputational risk management, which sets out the supervisory expectations for supervised financial institutions on the identification, assessment, and management of reputational risks that are commensurate to their size, nature, and complexity of operations, overall risk profile, and systemic importance. New sections on reputational risk management have been added to Manual of Regulations for banks. This circular shall take effect fifteen days following its publication either in the Official Gazette or in a newspaper of general circulation. Institutions have one year to fully comply with these guidelines.
- Circular on amendments to the provisions of the Manual of Regulations for Non-Bank Financial Institutions to enhance corporate governance guidelines for Non-Stock Savings and Loan Associations. This circular shall take effect fifteen days after its publication either in the Official Gazette or in a newspaper of general circulation.
- Circular on amendments to the guidelines on recovery plan of a domestic systemically important bank (D-SIB) as provided in the Manual of Regulations for Banks, particularly on requiring D-SIBs to submit separately their Internal Capital Adequacy Assessment Process (ICAAP) document and recovery plan. D-SIBs are expected to ensure the processes and information contained in these documents are consistent, coherent and up to date. This circular shall take effect fifteen days following its publication either in the Official Gazette or in a newspaper of general circulation.
- Circular on amendments to the provisions of Manual of Regulations for Banks and the Manual of Regulations for non-bank financial institutions. These amendments are related to operational risk management and internal control measures. This circular shall take effect fifteen calendar days following its publication either in the Official Gazette or in a newspaper of general circulation.
- Memorandum on amendments to BSP regulations on the credit-related regulatory relief measures for those affected by COVID-19 pandemic as an interim measure, pending the full operationalization of the Financial Institutions Strategic Transfer Act in 2021. The amendments relate to the exclusion of eligible loans from the past due and non-performing loan (NPL) classification as well as the relief measure on increase in the single borrower’s limit.
- Press Release on Reputational Risk Management Guidelines
- Circular on Reputational Risk Management Guidelines
- Circular on Corporate Governance Guidelines
- Circular on Recovery Plan Guidelines
- Circular on Operational Risk Management and Internal Control Measures
- Memorandum on COVID-19 Relief Measures
- Press Release on Financial Sector Forum
- Manual of Regulations for Banks (PDF)
- Manual of Regulations for Non Banks (PDF)
Keywords: Asia Pacific, Philippines, Banking, Securities, Fintech, Operational Risk, Reputational Risk, Resolution Framework, Manual of Regulations, Credit Risk, COVID-19, ICAAP, Resolution Plan, Corporate Governance, D-SIBs, NBFI, Basel, BSP
Leading economist; commercial real estate; performance forecasting, econometric infrastructure; data modeling; credit risk modeling; portfolio assessment; custom commercial real estate analysis; thought leader.
In a letter addressed to the industry, the Australian Prudential Regulation Authority (APRA) set out an updated schedule of policy priorities for the banking, insurance, and superannuation industries.
The European Banking Authority (EBA) published answers to 29 questions in the Single Rulebook Question and Answer (Q&A) tool in September.
The European Commission (EC) adopted a comprehensive review package of Solvency II rules in the European Union.
The Office of the Comptroller of the Currency (OCC) issued Versions 1.0 of the "Earnings" and "Regulatory Reporting" booklets of the Comptroller's Handbook.
The European Central Bank (ECB) published results of its economy-wide climate stress test, which aimed to assess the resilience of non-financial corporates and euro area banks to climate risks.
The European Banking Authority (EBA) published a report on the use of digital platforms in the banking and payments sector in European Union.
The Hong Kong Monetary Authority (HKMA) published updates on the policy measures that were announced in context of the ongoing pandemic.
The International Swaps and Derivatives Association (ISDA), along with several other associations, submitted a joint response to the Basel Committee on Banking Supervision (BCBS) consultation on preliminary proposals for the prudential treatment of cryptoasset exposures.
BIS published the September issue of the Quarterly Review, which contains special features that analyze the rapid rise in equity funding for financial technology firms, the effectiveness of policy measures in response to pandemic, and the evolution of international banking.
The Basel Committee for Banking Supervision (BCBS) met in September 2021 and reviewed climate-related financial risks, discussed impact of digitalization, and welcomed efforts by the International Financial Reporting Standards (IFRS) Foundation to develop a common set of sustainability reporting standards