Peso Real Time Gross Settlement (RTGS) Rules

BANGKo SeNTnaL NG PILIPINAS OFFICE OF THE GOVERNOR M EMORAN DU M NO. M-2O22-O49 To All Peso RealTime Gross Settlement Payment System (RTGS PS or PhilPoSSp'"') Participants Subject Peso Real Time Gross Settlement (RTGS) Rules The Monetary Board (MB), in its Resolution No. 1680 dated 17 November 2022, approved the following rules covering the operation of the Peso Real Time Cross Settlement Payment System (RTCS PS or the PhilPoSSpt"), which is a designated payment system under MB Resolution No. 992 dated 29 July 2021. Section l. The following sections shall be created in the Manual of Regulations for Payment Systems (MOR PS): Part 6. The Peso RTGS Payment System 60l Policy Statement. The Peso RealTime Cross Settlement Payment System (RTCS PS) is critical for maintaining price and financial stability, as well as preserving public interest. This payment system ensures the smooth flow of funds between financial institutions that maintain settlement accounts (SAs) with the Bangko Sentral. lt also facilitates funds transfers in financial markets where these institutions trade securities and foreign currencies for business and risk management purposes. By providing the settlement facility for the open market operations of the Bangko Sentral, the RTCS PS also supports the Bangko Sentral's mandate of maintaining price stability. Moreover, this system plays an indispensable role in upholding public welfare, enabling the efficient and low-risk settlement of retail payments in central bank money. In this regard, the Bangko Sentral adopts rules in its capacity as owner and operator of the RTCS PS to govern the operation of this designated payment system. These rules shall apply to the participants of the RTCS PS, including banks and other financial institutions, financial market infrastructures (FMls), clearing switch operators (CSOs), and critical service providers (CSPs). 602 Governancet. The Bangko Sentral's Peso RTCS Management Committee (ManCom) shall manage the operation of the RTCS PS, which has been designated by the Monetary Board (MB) as a Systemically lmportant Payment System (SIPS). The ManCom is composed of officers of concerned Bangko Sentral units and departments, which are involved in sustaining the smooth functioning of the payment system. The ManCom reports to the Monetary Board through the Covernor of the Bangko Sentral. ln performing its function, the ManCom may seek guidance from the Bangko Sentral Deputy Covernor who is responsible for payments and currency management. I The Bangko Sentral publishes a Primer on the Operation of the RTCS PS. The Primer covers Covernance, Business Continuity Management, and Transaction Fees, among other matters pertaining to the RTCS PS. Page I of15

The ManCom shall be responsible for sustaining the safe, efficient, and reliable operation of the RTCS PS and ensuring compliance of this payment system with regulatory expectations. In accomplishing this mandate, the ManCom performs the fol lowi ng key fu nctions: Review and endorse for MB approval the policy proposals and/or amendmenrs pertaining to the operation of the payment system; h oversee the implementation of programs, policies, and procedures, which are aimed at ensuring that the operation of the RTCS PS aligns with globalstandards or best practices and complies with laws, regulations, and MB directives on payment systems; a Take initiatives or evaluate recommendations in response to the issues on the operation of the RTCS PS and the evolving needs of the payment participants; and d. Collaborate with the industry, local regulators, and foreign central banks, as applicable, on major RTCS PS rules and initiatives that can be successfully accomplished through partnership with them. Consistent with the Bangko Sentral's Covernance Policy for Operators of Payment Systems under Section lOl of the Manual of Regulations for Payment Systems (MORPS), the Bangko Sentral shall adopt the governance arrangement requirements to the extent applicable in the context of a payment system that is owned and operated by a central bank. 603 Definition of Terms. These rules use the following terms in addition to those defined iN thc MORPS: a. Delivery versus Poyment (DvP)- a securities settlement method that guarantees the transfer of securities only after payment has been made2 b. Deferred Net Sett/ement (DNS/ - a settlement mechanism which settles on a net basis at the end of a pre-defined settlement cvcle3 c. Oridlock - a situation that can arise in a funds or securities transfer system, in which the failure of some transfer instructions to be executed (because the necessary funds or securities balances are unavailable) prevents a substantial number of other instructions from other participants from being executeda d. Gridlock resolution - the optimizing mechanism automatically initiated by the RTCS system to resolve a gridlock e. Poyment versus Poyment (PvP) - a process which ensures that the final transfer of a payment in one currency occurs if and only if the final transfer of a payment in another currencv or currencies takes olaces ln bis.org glossory. Retrieved from https;//www.bis.org/cpmi/publ/dOOb.htm?&selection=26&scope=CPM l&c=a&base=term /bid. Retrieved from https://www.bis.orglcpmi/publ/dOOb.htm?&selection=24&scope=CPM l&c=a&base=term /bid. Retri eved f ro m https://www. b s.orglc p m i/g ossa ry-0303O1. pdfl i I 5 /bid. Retrieved from https://www.bis.org/cpmi/publ/dOOb.htm?&selection=5O&scope=CPM l&c=a&base=term

Reol-Time Cross Setf/ement (RTCS)- a system that provides real time settlement of payments, transfer instructions, or other obligations individually on a tra nsaction-by-tra nsaction basis6 g. Sett/ement - an act that discharges obligations in respect of funds transfers between two or more partiesT h. Sett/ement occount (SA) - account maintained with the Bangko Sentral and used by a participant for settling financial transactions through the RTCS system 60,4 Compliance with Laws, Regulations, and Standards. The RTCS PS, which includes its participants, shall comply with laws and regulations on payment systems. The operation of the RTCS PS shall be aligned with the relevant principles for FMls. Should there be a conflict between local and foreign laws or regulations in so far as the RTCS PS operation is concerned, the Philippine laws and regulations shall prevail. 605 Participants. The participants in the RTCS PS are, as follows: a. Porticiponts with SAs. These include banks, non-bank financial institutions with quasi-banking functions, non-bank electronic money issuers, ano government agencies, as well as Bangko Sentral departments that conduct monetary operations and those responsible for disbursing and receiving funds on behalf of the Bangko Sentral. The participating financial institutions may sponsor other entities into settlement. Except for the Bangko Sentral departments, a Participation Agreement mutually executed with the Bangko Sentral shall document and govern the participation of these entities in the RTCS PS. b. Sponsored Porticiponts. These are financial institutions sponsored into settlement through the RTCS system. Any sponsorship into settlement shall comply with the following guidelines: (l) The transactions of a sponsored participant shall be considered as the sponsoring participant's own transactions. As such, the sponsoring participant shall be held responsible for any loss, liability, or damage caused by the sponsored participant insofar as settlement is concerned. (2) The sponsorship shall be covered by a formal contract between the sponsoring and sponsored participants. The contract shall include a provision addressing settlement default situations caused by either or both the sponsoring and the sponsored participants. (3) The sponsorship terms and conditions should promote access to the RTCS PS without compromising the safety and efficiency of the system. (4\ The sponsoring participant shall adopt risk-mitigating measures to ensure that the risks it assumes as sponsor are kept at manageable level. These measures include the performance of due diligence to ensure that the participant it sponsors complies with the RTCS PS rules. ln bis.org glossory. Retrieved from https://www.bis.org/cpmi/publ/dOOb.htm?&selection=56&scope=CPM l&c=a&base=term Section 4(s) of the National Payment Systems Act Page 3 of15

(5) The sponsorship contract shall require the sponsored participant to submit pertinent information, if any, to the sponsor for risk management purposes. (6) The sponsoring and sponsored participants shall comply with the Bangko Sentral's reporting requirements pertaining to the sponsorship. c. FMls. These are infrastructures that are interlinked with the RTCS system to enable settlement of security, foreign exchange (FX), and otherfinancial market transactions in accordance with the DvP and PvP mechanisms, which minimize the principal risk associated with such transactions. The business between the Bangko Sentral and the operator of an FMI that interfaces with the RTCS PS shall be conducted in accordance with a contract in an appropriate form (e.9., Terms of Reference, Memorandum of Agreement, Memorandum of Understanding, etc.), the provisions of which shall be compliant with these rules. CSOs. These are clearing organizations that are permitted to interconnect with the RTCS system for purposes of settling retail payments in accordance with the National Retail Payment System regulatoryframework. The interlinkage of the CSOs with the RTCS PS shall be in accordance with operating guidelines or a formal agreement between the Bangko Sentral and the CSO. The provisions of the guidelines or agreement shall be consistent with these rules. CSPs. These are technology companies that provide solutions which are vital to the operation of the RTCS PS. Prior to providing services to the RTCS PS, a CSP shall enter into a service contract with the Bangko Sentral, the provisions of which shall be aligned with these rules. 606 Participation Requirements and Procedure. The Bangko Sentral adopts fair and risk-based criteria for determining the entities that can participate in the RTCS PS. While participation is open regardless of the size of a prospective participant and the complexity of its business, the Bangko Sentral considers the applicants' capacity to fulfil operational, financial, legal, and regulatory pre-requisites to manage participant- induced risks for the safety and efficiency of the payment system: o. Operationol requirements. The participants shall comply with the Bangko Sentral's connectivity requirements, which enable even small financial institutions to participate in the RTCS PS. As required under Section 6.13 below, the participants shall also have a comprehensive risk management system, which shall include system access controls, information security measures, and business contin uity pla n. b. Finonciol requirements. The participants shall manage their daily liquidity positions and credit exposures in order not to cause settlement failure, which may have systemic impact on the payment system. Legol ond regulotory requirements. The participants shall possess the necessary licenses, authorities, and membership(s) to be able to participate in the payment system.

The institutions applying to settle transactions through the RTCS PS shall comply with the requirements and undergo the process shown in Annex L The Bangko Sentral department that is responsible for evaluating the application may gather relevant information from other Bangko Sentral department(s). 6O7 Cessation of Participation. Participation in the RTCS PS may be terminated through any of the following modes, as applicable to the case of the concerned participant: Voluntory Withdrowol - refers to a mode where the participant voluntarily ends its participation or surrenders its secondary license (e.9., banking license), subject to the approval of the Bangko Sentral; Closure of Operotion - results from a decision of the MB or any lawful authority to order the dissolution, revocation of license, or prohibit a participant from dolng business in the Philippines; Merger or consolidotion - terminates the participation of the merged or acquired entity after the approval of the merger or consolidation by the MB or any lawful authority; or d Plocement under insolvency, bonkruptcy or rehobilitotion by o competent court or quosi-judiciot ogency - results in the deactivation of a participant's account upon receipt by the Bangko Sentral of a notification from the participant, which is required to inform the Bangko Sentral on the day of the participant's receipt of the order or resolution issued by the court or quasi- judicial agency. The Bangko Sentral shall issue an Advisory on the cessation of participation of any of the oarticioants. The process involved in the cessation of participation through voluntary withdrawal is provided in Annex 2. 609 Messaging Channels and Communication Standards a. Messoging Chonnels. A participant may use one or more of the following payment messag ing channels: (1) Society for Worldwide lnterbonk Finonciol Telecommunicotion (SWIFT) messoging system - an internationally accepted messaging system that runs through a leased line; (2) Porticipont Browser - a web-based messaging system provided by the Bangko Sentralto certain RTCS PS participants; and (3) Virtuol Privote Network - StroightThrough Processing (VPN-STP)Ootewoy - a communication module that provides a means of financial message exchanges between the central node and the participants'platforms using a VPN connection. Due to changes in the operating environment of the Peso RTCS PS, the Bangko Sentral may terminate or enhance any of the above channels, as well as provide additional means of system access. Atransitory period shall be set out to ensure the smooth implementation of any of these changes. Page 5 of15

b. Communicotion Stondords. The participants shall comply with the payment messaging standards, including the mandatory message contents, required by the Bangko SentralE. They shall refer to pertinent Bangko Sentral issuances, such as the Rulebook PH-lSO 2OO22e Standard on Payment Messages, for guidance on compliance with this rule. 609 Types of Transactions. The RTCS system shall settle Peso-denominated funds transfers. These transfers represent time-critical and high-value payments, which include: Movements of funds between the individual participants' proprietary accounts; b. I nterba n k/i nte r-i nstitution tra nsfers fo r proprieta ry tra nsactions; c. Interbank/inter-institution transfers for further credit to customer accounts; d. Covern ment col lections; e. Withdrawals from and deposits into the accounts maintained with the Bangko Sentral; f. Transactions with the Bangko Sentral Financial Markets, including placements in deposit facilities and maturities of deposits, availments and maturities of the Overnight Lending Facility, and purchase or sale of FX and securities; v. Settlements related to the Bangko Sentral's Intraday Liquidity Facility (lLF); h. The money settlement leg of security trades; i. The Peso leg of FX trades; i J' Clearing results for checks, automated teller machine (ATM) transactions, digital payments, and other types of retail payments; and K. Other large value transactions or those that are not considered as retail payments under Bangko Sentral regulations. 6lO Settlement. Money settlements through the RTCS system shall comply with the following rules: Operoting hours. The Bangko Sentral shall prescribe the normal operating hours of the RTCS PS. Exceptions to regular business hours shall be in accordance with the Bangko Sentral regulation on Public Sector Holidays and other announcements of the Banqko Sentral. b. SA bolonces. Before the opening of the RTCS PS, the Statements of Account (SOAs) as of the immediately preceding business date shall be released to the participants that maintain SAs with the Bangko Sentral. The system shall be able to display the real-time account balances of these participants at any time during the system's business hours. Required Levels of SA bolonces. The concerned participants shall maintain an appropriate level of SA balances to cover their outgoing payments in a timely manner. To prevent settlement risk arising from an unreasonable number of transactions that cluster towards the end of the business day, the participants that habitually schedule their settlements near the close of business to take undue advantage of funding from incoming payments shall be subject to appropriate penalties and sanctions under Section 62.| below. d. Execution of sett/ement instructions. The execution of settlement instructions shall be done following the guidelines set out below: I Bangko Sentral Circular Letter (CL) No.2Ol9-O53 dated 5 August 2Ol9 e Universal Financial Industry Message Scheme

(l) The processing of any settlement instruction shall be subject to the sufficiency of funds in the SA of the sending participant. (2) Settlements shall be based on a set of business priority codes assigned to payment transactions. Payments to participating government institutions shall be prioritized over all other transactions. r"l settlement shall be allowed only if the sender and receiver maintain SAs with the Bangko Sentral. In case of sponsored participation, the sponsoring participant is construed to be the sender of the outgoing payments and receiver of the incoming settlements of the sponsored participa nt. (4) Electronic notifications on the status of settlement shall be sent to the sending participant if the payment were rejected or queued, or to both the sendlng and receiving participants if the transaction were settled. (s) Except for settlements of clearing results, which are subject to the rule under the next item, the RTCS system shall place the amount to be settled in the queue if the account balance of a sending participant were insufficient, until the: (i) SA balance increases to a level that adequately addresses the shortfall; (ii) participant cancels the transactions; or (iii) RTCS PS has closed for business. (6) Clearing results, except for ATM transactions, shall be settled on an "all or nothing" basis. (7) The RTCS system shall have a gridlock resolution mechanism to ensure continuous flow of settlements. (8) The RTCS system shall reject all transactions that remain in the queue at close of business. c. Monuol Sett/ements. Participants requesting manual settlements i.e., the encoding of settlement instructions by the concerned Bangko Sentral department, may be accommodated under the following circumstances: (t) Settlement of transactions cannot be completed due to technical and/ or connectivity issues, as validated by the Bangko Sentral's lT Support Team; or (2) A payment has been erroneously credited to any of the SAs of the Bangko Sentral departments, giving rise to the obligation of the Bangko Sentral to make another transaction for the return of the erroneous funds transfer. To instill discipline in the participants, the Bangko Sentral may impose penalties and sanctions on a sending participant that requests a manual adjustment to correct its error. Requests for manual transfers from a participant to a non-participant, or vice versa, shall not be accommodated. Paqe 7 of 15

The manual settlement process is provided in Annex 3. f. Extension of Business Doy. The Bangko sentral may extend end of day (EoD) upon confirmation of unforeseen events, which give rise to abnormal RTCS PS conditions that hamper real-time settlement. These conditions refer to delays, disruptions, and other operational problems and issues, including those pertaining to ancilliary systems that connect to the peso RTCS system. The Bangko Sentral shall issue an Advisory to announce an extended EOD not later than the normal close of business. Finolity of settlement. When a payment is transmitted by a participant, FMl, or CSO to the RTCS PS and the SAs of the paying and receiving participants have been debited and credited, respectively, in the RTcs system, said payment shall become final and irrevocable and shall not be subject to reversal for any reason whatsoever: provided, that, if it is shown and established that the payment was not legally due, the settlement shall remain valid and the return of the amounr transferred shall constitute a new monetary obligation between the receiving participant and the sending participant. The settlement of an ILF drawdown and the subsequent return of the amount drawn shall be deemed final and irrevocable once the SA of the concerned participant has been credited or debited in the RTCS system. The RTCS PS shall not allow backdating of settlements except in extraordinary circumstances where the RTCS PS needs to invoke extended EOD operation. h. Exchonge-of-vqlue sett/ernents. To manage principal risk, the RTCS PS, in coordination with the other FMls that interface with it, shall adhere to the DvP mechanism where it shall settle the money leg of a security transaction only when the security involved has been delivered or at least earmarked by the concerned FMI in favor of the buying participant. The RTCS PS shall also adopt the PvP mechanism, where it shall settle the Peso leg of an FX trade only when it has received a settlement instruction from the FMI on the other end. Automatic rejection of settlement instructions. Any instruction received by the RTCS system before the activation of the payment receipt functionality of the system and after the close of business shall be automatically rejected. Poyment returns. The return of any erroneous settlement, such as a payment to the wrong participant, a duplicate funds transfer, or an over-payment, shall be requested by the sending participant from the receiving participant. lf the receiving participant that has control over the funds at the time of the request fails to return the funds until the next business day, the sending participant is entitled to claim compensation in accordance with the following rules: 0) The claim for compensation shall be covered by an indemnity or written undertaking by the sending participant and shall be made within five (5) business days from the date of the erroneous settlement. Otherwise, such claim for compensation may not be honored by the receiving participant. (2) The claim for compensation shall be computed based on the following formula: Compensotion = (Amount of Poyment) x (overoge Bongko Sentrol Overnight Deposit Focility rote) x (No. of Doys of Deloy)/ 360

k. Housekeeping. EoD procedures such as maintaining back-up files and releasing statement messages shall be performed after the RTCS PS business hours. Reconciliotion. Each participant shall be responsible for the reconciliation of the SA balances between the participant's record and that of the RTCS system. Any discrepancy noted during reconciliation shall be reported for resolution to the concerned Bangko Sentral department within seven (7) days from receipt of the statement of account. 6ll Settlement Guarantee Mechanisms. The RTCS PS shall implement the settlement guarantee mechanisms that the Bangko Sentral prescribes for payments that are settled followinq the DNS scheme. 612 Settlement of Disputes Participants. Disputes that may arise between participants on matters pertaining to their RTCS transactions shall be resolved by the ManCom. Final decisions of the ManCom shall be binding on all parties to the dispute. 613 Comprehensive Management of Risk. In line with the Bangko Sentral's regulatory expectations from institutions subject to its supervision and oversight, the Bangko Sentral expects that the management of risks arising from participation in the RTCS PS is an integral part of the participants' operation. To ensure that risks are comprehensively addressed, the participants shall establish policies, procedures, and controls, which are aimed at mitigating legal, credit, liquidity, general business, and operational risks. The participants shall consider not only the risks to themselves but also those that they pose to the RTCS PS. 614 Reporting Requirements. A participant shall submit reports that the Bangko Sentral may reguire on a periodic or on call basis. These reports, which include an annual Attestation Report certifying that the participants continue to comply with the terms and conditions on participation, should be accurate, complete, and timely'o. 615 Intraday Liquidity Facility (lLF). The Bangko Sentral provides an ILF to eligible participants to ensure that payments smoothly flow through the RTCS PS and that interdependent settlements are executed in a timely manner to manage systemic risk. The ILF operation shall be in accordance with Section 29O of the MORB and Sec. 4278Q of the Manual of Regulations for Non-Bank Financial Institutions. As an incentive to financial institutions that participate in the RTCS PS, the Bangko Sentral imposes no fee on ILF provided that the concerned participant settles its obligation within the prescribed period on the same day the ILF is used. 616 Incident Management. Civen the crucial role of the RTCS PS in the financial system and the economy in general, the participants shall manage adverse incidents in collaboration with the Bangko Sentral. In particular, the participants shall: ro Should be free from error and submitted with supporting information, as necessary, within the timeline prescribed by the Bangko Sentral Page 9 of15

a. Report immediately any problem on system access, report generation, transaction monitoring, receipt of settlement notifications, and other relevant issues after determining that the problem is attributable to external factors based on investigation and support conducted by their lT teams; b. Coordinate with the Bangko Sentral in addressing the problem after receiving Bangko Sentral notifications and instructions through email, advisory, and the official social media platform which has been created by the Bangko Sentral exclusivelv for the RTCS PS particioants: c. Make available any assistance and resources expected on their end to contribute to efficient problem resolution; and lnform the Bangko Sentral as soon as they have noted that the problem has been addressed. 617 Business Continuity. The participants shall operate with a resilient, documented, and tested business continuity plan (BCP), which shall be compliant with the requirements of Section 129 of the MORB and Section 148-Q of the MORNBFI on Business Continuity Management, as applicable, and shall provide for the following contingency measures: Primory follbock focility(ies). Back-up facilities which are located at the main site; Remote recovery site(s/. Places which are sufiiciently distant from the main site and can be readily accessed for resumption of operation; Connectivity bock up(s). Secondary lines and network connections;and ^ Alternqtive operoting procedure(s/. Measures enabling settlement processing, should a disruption prevent the performance of business-as-usual procedures. To strengthen their BCPs, the participants may have multiple access channels in place. These channels include SWIFT, RTCS Participant Browser. and VPN-STP. In the case of FMls and CSOs that interface with the RTCS system, a joint BCP between the Bangko Sentral and the FMls/CSOs shall be adopted to ensure end-to- end continuity of interlinked clearing and settlement. The participants shall review their BCPs at least annually to keep their plans attuned to evolving market and payment system developments, as well as technology advancements or enhancements. The BCPs shall also be tested, on an annual basis, at a minimum, to ensure that they remain effective despite changes in operating conditions. Should the Bangko Sentral conduct a BCP test involving external stakeholders, the concerned participants shalltake part in said test. 618 System Enhancement and Testing. The Bangko Sentral may implement system enhancements in response to the participants' needs. The proposed system enhancements that require coordination between the Bangko Sentral and the participants are those that involve alterations to system functionalities, operational timelines, settlement procedures, access controls, and other significant system modifications. System enhancements shall undergo rigid testing before these are promoted to the production environment. Should testing involve the participants, they shall Page lO of 15

cooperate and make the required resources available for the successful conduct of the tests. The participants shall implement any operational and/or technical changes required on their end to maintain compatibility of their respective environments with the RTCS svstem. 619 Settlement Fees and Other Charges. Payments made through the RTCS system are subject to settlement fees and other charges, which shall be automatically debited from the SAs of the participants. The fees and charges shall support the operation and development of the RTCS PS. The pricing methodology shall be reviewed periodically to determine any necessary adjustment in response to internal and external developments. The fees and charges may be waived as a relief measure or an incentive for the participants. 620 Supplementary Rules. The participants shall comply with the supplementary rules that the Bangko Sentral may issue to properly implement certain provisions of these rules, including, but not limited to, procedural guidelines for settlement of disputes, reportlng requirements, fees and other charges, and business day schedule. 621 Penalties and Sanctions. Depending on the gravity of the offense committed by a participant, the Bangko Sentral may impose penalties and sanctions, which may include fines, suspension of the participant's privilege to avail of the lLF, and suspension or termination of the participant's access to the RTCS PS. Repeat offenders shall be meted with stiffer penalties and sanctions. Section 2. These Peso RTCS Rules shall take effect fifteen (.l5) calendar days following its publication either in the Official Cazette or in a newspaper of general circulation, and shall supersede the "Rules and Regulations Coverning the Philippine Payment and Settlement System (PhilPaSS)" dated 20 May 2019. For guidance and implementation. f ,_ l\r e_ FELIPE M. MEDALLA Covernor {1 Nou"-ber2022 Page ll of 15

Annex I Participation Requirements and Procedurerr a. The applicant shall submit the following documentsr2 in support of its application for participation: 0) Original copy of the following documents to be transmitted to: The Director Payments and Settlements Department (PSD) Room 1Ol, S-Storey Building Bangko Sentral ng Pilipinas A. Mabini Street, Malate,lOO4 Manila (i) Application Letter; (ii) Signed and notarized Participation Agreement that defines the roles and responsibilities of the Bangko Sentral and of the Participant; (iii) Virtual Private Network (VPN) Connectivity Registration Forml3; (iv) Secretary's Certificate attesting to the resolution of the applicant's Board, authorizing the institution to apply for participation in the RTCS PS, providing the list of authorized officers/signatories, and certifying the specimen signatures of these authorized officers/sig natories; a nd (21 Electronic submission of the scanned copies of the above documents is a I lowed, provided that: (i) such copies are accompanied by a duly accomplished Summary Statement Form (SSF) and each page of said documents, including the SSF, is certified by the applicant's authorized officer; (ii) emailed with a subject in this format: .Appl ication> u nderscore< RTGSPS> u nderscorecAppl ica nt's Acronym>u nderscore.type of su bm issiont; and (iii) sent by a registered email sender to the Director, PSD at [email protected] The Bangko Sentral may require supporting documents other than those enumerated above. b. Applications with complete documents shall be processed by the Bangko Sentral. lf the submission were incomplete or erroneous, the applicant shall receive a Notice of Deferment of the processing of its application. c. A successful applicant shall comply with the following requirements prior to the activation of its account: 11 Applicable only to institutions applying to settle transactions through the RTCS PS 12 Templates posted on the Bangko Sentral website (wwrv.bsp.gov.ph) r3 Connection using a leased line 11 Bangko Sentral Memorandum No. M-2O2O-O7O dated 21 September 2O2O (e-Submission of Documents to the Pavments and Settlements Office)

0) Allow the Bangko Sentral to configure and test the Participant's VPN connectivity; (2) Attend a briefing on the use of the RTCS PS Participant Browser to be conducted by the Bangko Sentral; and (3) Enroll its authorized user(s) bysubmitting the RTCS PS Participant Browser User Account Form to the PSD. d. The Bangko Sentral shall issue a non-transferrable Smort Cord kitrs to each enrolled user, who is authorized by the Participant to send payment messages to the RTCS system on its behalf. The Participant shall be accountable for the use of the Smort Cord. The Participant can deactivate or lock the access of any of its registered RTCS system users by electronically submitting to the PSD a User Account Form, requesting deactivation or locking of the user's profile in the RTCS system. e. The Participant shall submit a duly accomplished Channel Registration Form if it intends to use SWIFT or the VPN-STP payment messaging channel. rs The Smart Card Kit contains the card with personal identification number (PlN) and personal unblocking key (PUK), and the reader.

Annex 2 Cessation of Participation in the RTGS PS through Voluntary Withdrawal a. The Chief Executive Officer, or its equivalent, of the Participant shall formally notify the Bangko Sentral of its voluntary withdrawal of participation from the RTCS PS. This letter shall disclose the reason for voluntary withdrawal and the effectivity date, which should not be earlier than seven (7) working days from the Bangko Sentral's receipt of such notification. b. The letter shall be addressed to: The Director Payments and Settlements Department (PSD) Room lOl, S-Storey Building Bangko Sentral ng Pilipinas A. Mabini Street, Malate.lOO4 Manila c. lf the notification is electronically sent, the copies of the letter and Summary Statement Form (SSF), each page of which must bear the stamp "Certified True Copy" and the signature of the Participant's authorized officer, shall be emailed by a registered email sender to the Director, PSD, at [email protected]. d. The Participant may be required to submit other documentary requirements, as deemed necessary. e. The Bangko Sentralshallacknowledge receipt of the Participant's letter of voluntary withdrawal and advise the Participant of the date of closure of its SA. as determined by the Bangko Sentral. f. The Bangko Sentral shall issue an Advisory on said termination of participation.

Annex 3 Procedure for Manual Settlements a. The Participant shall accomplish the Manual Settlement Form (MSF),16 signed by two (2) authorized signatories as indicated in its Secretary's Certificate. b. lf the MSF and Summary Statement Form (SSF) are electronically submitted, each page of such forms shall be stamped with "Certified True Copy" and signed by the Participant's authorized officer(s). c. Using the email that is registered with the Bangko Sentral Payments and Settlements Department (PSD), the Participant shall send the duly accomplished forms to [email protected] on or before 5:3O p.m. on the value date of the settlement. Any request received after this cut-off time shall not be accommodated. d. The PSD shall evaluate the request. Upon approval, the PSD shall encode the corresponding entry. e. The PSD shall confirm the execution of the manual settlement by returning a copy of the Bangko Sentral-approved MSF to the Participant via email. f. The sending and receiving Participants may view the amounts posted under their SAs, through the RTCS system. 16 Template posted on the Bangko Sentral website (vwvw.bsp.gov.ph)