Amendments to the Regulations Requiring the Submission of the Report on the Sworn Statement on Real Estate/Chattel Transactions

BANoKo SeNrnnL No PrurpiNes OFFICE OF THE GOVERNOR . ctRcu[AR No. 737 Series of 2011 Subject: Amendments to the Regulations Requiring the Submission of the Report on the Sworn Statement on Real Estate/Chattel Transactions The Monetary Board in its Resolution No. 1338 dated L September 2O!,!, appr:oved the following amendments to the regulations requiring the submission of the Report on the Sworn Statement on Real Estate/ChattelTransactions. Section 1. Section XL4f,,and its subsections, are hereby added to the Manual of Regulations for Banks (MORB)to read as follows: *Section X148. Real Estate and Chattel Transactions with DOSRI and Employees. The following regulations shall govern all real estate/chattel transactions (such as, but not limited to, rentals or leases, purchases and sales; of the bank's owned property, including forectosed assets) entered between the bank and its director(s), officer(s), stockholder(s) or related interest(s), as defined under ftems "a", ob", "c" and "e", respectively, of Subsec. X326.t or between the bank and its employee(s). t'Real estate/chattel transactions with DOSRI and'employee(s) shall require the prior written approval of the majority members of the board of directors, with the exclusion of the director(s) concerned in cases where the transaction involves the director(s) or his related interest(s): Provided, however, That real estate/chattel transactions with a bank's officer(s)/employee(s)that are availed in strict conformity with the terms and conditions of a BSP-approved fringe benefit program shall require the prior written approval of the bank's duly authorized committee/officer(s). "Real estate/chattel transactions with DOSRI and/or employee(s) shall, at all times, be entered into in the best interest of the bank. Records and supporting documents on such real estate/chattel transactions shall be adequately maintained and made available for inspection and/or submitted upon request of the BSP. "Subsection Xlil8.7 Certification on real estate/chottel tronsoc;tions with DOSRT and employee(s). "Banks shall, within ten (10) banking days from approval by a majority of its board of directors, submit to the appropriate department of the SES, the Certificotion on Real Estote/Chottel Transactions with DOSRI ond Employee(s) (prescribed format attached as Annex A), covering real estate/chattel transactions A. Mabini St., Malate.l004, Manila, Philippines o (632) 524-70-l I O www.bsp.gov.ph O [email protected]

between the bank and its director(s), officer(s), stockholder(s), related interest(s) and employee(s), except those that are availed in strict conformity with the terms and conditions of a fringe benefit program approved by the bank's board of directors and by the BSP. "The Certification on Real Estote/Chottel Tronsactions with DOSRI and Employee(sJ shall be accompanied by a certified true copy of the resolution of the bodrd of directors authorizing said transaction(s) and shall be signed by at least the majority members of the bank's board of directors (excluding the director(s) concerned in the case of transactions involving the director(s) or his related interest(s)) who shall be required to certify therein, that: "(a) The transactions were approved by a majority of the bank's board of directors, excluding the director concerned (in the case of transactions involving the director or his related interest(s)), in a meeting held for such purpose; "(b) A certified true copy of said approval as manifested in a resolution passed by the board of directors is attached as an annex to the certification; "(c) The reported transactions have been thoroughly reviewed and verified as having been entered into in the best interest of the bank; and 'i(d) The records and underlying documents (e.g. contracts/agreements, etc.) supporting such transactions are adequately maintained and shall be made available for inspection by BSP examiners and submitted upon request of the appropriate department of the SES. "Said Certificotion on Real Estote/Chottel Transactions with DOSRT ond Employee(s) shall, at a minimum, disclose the following information: "(a) Board Resolution No. and date, "(b) Name of DOSRI/employee, "(c) Transaction date, "(d) Type of transaction (i.e., sale, lease, etc.), "(e) Description of real estate or chattel property (e.g., TCT No. or CCT No., location and areo in squore meters in case of reol property, ond certificate of registration nttmbe4 make, model number, serial number, motor number ond/or chassis number, os moy be opplicable, for chattels), " (f) Appraised or market value or prevailing rental rate, "(g) Reference or source of the amount reported under item " (fl" above, "(h) Net carrying value of the property, and

" (i) Transaction price (i.e., selling price, rental, etc.). "subsections X748.2 - X7:48.8 (Reserved) "Subsection X748.9 Sanctions "The following sanctions shall be imposed on the bank and/or its concerned directors/officers for violations noted : "7. On the bank "o. Monetory fines A bank which fails to comply with the provisions of this Section shall be subject to monetary penalties under Appendix 57. "1) For non-submission of the Certification on Reol Estate/Chattel Transoctions with DOSRI and Employee(s) ond/or the certified true copy of the resolution of the bonk's boord of directors A bank which fails to submit the Certification on Reol Estote/Chattel Transoctions with DOSRI and Employee(s) ond/or the certified true copy'of the resolution of the board of directors authorizing such transaction within the prescribed deadlihe shall be subject tO the monetary penalties applicable to less serious offenses under Appendix 67 which shall be reckoned on a daily basis from the day fof lowing the due date of submission until the required Certification on Reol Estote/Chottel Transoctions with DOSRI and Employee(s) and/or the certified true copy of the resolution of the board of directors is filed with the BSP. "21 For the willful moking of o false/misleoding stotement in the Certification on Reol Estote/Chattel Tronsactions with DOSRI and Employee(s)and/or the certified true copy of the resolution of the bonk's board of directors A bank which has been found to have willfully made a false or misleading statement in the Certificotion on Real Estote/Chattel Transoctions with DOSRI and Employee(s) and/or the certified true copy of the resolution of the bank's board of directors shall be subject to the monetary penalties applicable to less serious offenses under Appendix 67 for the willful making of a false or misleading statement which shall be reckoned on a daily basis from the day following the due date of the said certification until such time that an amended or corrected Certification on Real Estate/Chattel Tronsactions with DOSRI and Employee(s) and/or certified true copy

of the resolution of the board of directors has been submitted to the BSP. On the concerned director/officer "a. For willful non-compliance Directors/officers of the bank who willfully fail/refuse to comply with the provisions of this Section shall be subject to the monetary penalties appli,cable to less serious offenses under Appendix 67. "b. Forfotse/misleoding stotements Directors/officers which have been found to have willfully falsely certified or willfully subnnitted misleading statements in tlie Certification on Reol Estote/Chottel Tronsoctions with DOSRI ond Employee(s) and/or the certified true copy of the resolution of the board of directors shall be subject to the monetary penalties applicable to less serious offenses under Appendix 57, which shall be reckoned on a daily basis from the day following the due date of the said certification until such time that an amended or corrected certification or certified true copy of the resolution of the board of directors has been submitted to the BSP. The imposition of the above sanctions is without prejudice to the filing of appropriate criminal charges against culpable persons as provided under Section 35 of R.A. No. 7653 for the willful making'of a false/misleading statement." ' Section 2. Subsections X192.5 and X192.15 of the MORB are hereby deleted. Section 3. Appendix 6 of the MORB on reports required of banks is hereby amended by deleting the "Sworn Statement on Reol Estate/Chottel Tronsoction to DOS" (bttached as Annex B) as a regular report which is required to be submitted by banks. Section 4. Effectivity. This Circular shalltake effect fifteen (15) calendar days following its publication either in the Official Gazette or in a newspaper of general circulation FOR THE MONETARY BOARD: l-- Yt,t^mY- AMANDi M. TETANGCO, JR. I Governor tt s"pt.mber2011 Page 4 of4

Annex A Deadline : Within ten (10) banking days from approval of the board of directors' Submission: Appropriate Department of SES cE RTt F|CATIO N ON REAL ESTATE/CHATTEI TRANSACTTONS With Director(s), Officer(s), Stockholder(s), Related lnterest(s| lDOSRll and Employee(s! (Name of Bank) We hereby certify that the real estate/chattel transaction(s) entered into by the (name af bonk) with its DOSRI and employees as described in Schedule 1 was made in accordance with the provisions of Section X148 of the MORB and its corresponding Subsections. ln pirrticular, we certify that: 1. The transactions were approved by a majority of the lnome of bank)'s board of directors, excluding the director{s) concerned (in case of transactions involving the director(s) or his related interest(s)), in a (specifu whether reaular/speciall meeting hefd on (specifu date of boord meetina) for such purpose as stated therein; 2. A certified true copy of said approval as manifested in a resolution passed by the board of directors is attached as Annex A; 3. The reported transactions have been thoroughly reviewed and verified as having been entered into in the best interest ofthe bank; and 4. The records and underlying documents supporting such transactions are adequately maintained and shall be (a) made available for inspection by BSP examiners,. and (b)submitted upon request of the appropriate department of the SES.. Signature above Printed Name Director Signature above Printed Name Signature above Printed Name Director Director Signature above Printed Name Signature above Printed Name Director Director (include odditional signatories, if necessdry) Date SUBSCRIBED and SWORN to before me, this day of , with affiant(s)exhibiting his/hervalid identification as indicated below: I , Government lD/ Passport No. Names Date/Place of lssue Doc. No. Notarv Public Page No. Book No. Series of Page _ of _

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