Clarifications to BSP Circular No. 264 dated October 27, 2000, requiring foreign exchange (FX) sales by FOREX Corporations, amounting to $10,000 or more, to be supported by appropriate invoices/documents

CIRCULAR LETTER Series of 2000

TO:    ALL BANK AFFILIATED FOREX CORPORATIONS

The following are clarifications to BSP Circular No. 264 dated October 27, 2000, requiring foreign exchange (FX) sales by FOREX Corporations, amounting to $10,000 or more, to be supported by appropriate invoices/documents.

1.   Forex Corporations shall be covered by the provisions on sales of FX under Sections 2 and 12 of BSP Circular No. 1389, as amended. Sample documents needed to support the sale of FX are in Annex “A”.

2.   Forex Corporations may sell FX to service the following loans/obligations provided the sale is supported by appropriate documents:

Unregistered DA/OA imports;

Unregistered foreign currency loans/obligations to non-resident financial institutions; and

FCDU loans not eligible to be serviced with FX purchased from the banking system.

Only loans under items (b) and (c) above which are outstanding as of the effectivity of Circular No. 264 shall be allowed to be serviced.  In addition, proof of payment of the loans/obligations shall be made available by the Forex Corporation to the BSP for verification within three (3) days after date of sale.

3.      Forex Corporations shall not sell foreign exchange –

for investment purposes;

for payment of FX obligations to residents other than AABs; and

for the sole purpose of depositing the foreign exchange proceeds in a foreign currency deposit unit (FCDU) account.

ALBERTO V. REYES Deputy Governor