Amendments to the Manual of Regulations for Banks and Manual of Regulations for Non-Bank Financial Institutions as of End-October 2015

BANoKo SENTRAL NGr PILIPINAS OFFICE OF THE GOVERNOR ctRcutAR No. so3 Series of 2016 subject: Amendments to the Manual of Regurations for Banks and Manual of Regulations for Non-Bank Financial Institutions as of End-October 2015 The Monetary Board, in its Resolution No. 113 dated 21 January 20L6, approved the following amendments to the Manual of Regulations for Banks {MORB) and Manual of Regulations for Non-Bank Financial lnstitutions (MORNBFI) as of end- October 2015. Section 1. Appendix A of Circular No. 871 dated 05 March 2015 (lnternal Control and Internal Audit) is appended to the MORB/MORNBFI and retitled as follows: Portion of the Title New Appendix Circular MORB/MORNBFI Appendix A Examples of Minimum Internal App. LL2/ Control Measures App. Q-oo Reference to the above.appendix is added to Subsection X185.3/a1g5e.3 of the MORB/MORNBFI. Section 2. The provisions of Circular No. 875 dated 15 April 2015 (BSp Supervisory Enforcement policy) are numbered as X009/4009e/4009T of the MORB/MORN BFl, respectively. Section 3. The provisions of Circular-Letter No. CL-2015-050 dated 18 August 2015 (Consolidation Program for Rural Banks (CPRB) are codified in the MORB as follows: Portion of the Title New Section/ Circular Letter Appendix 2"" par. (last Consolidation Program for Rural x109 sentence) and Banks 3'd paragraDh Annex A Framework on the Consolidation App. 113 Program for Rural Banks A. Mabini st., Malate 1004 Manila, Philippines e (ffi2) to\-77-o'l.www.bsp.gov.pho [email protected]

Section 4. The Power of the Bangko Sentral to Examine Trust Corporations under Circular No. 884 dated 22 July 2015 (Guidelines on the Establishment and Operation of Trust Corporation)is codified in the MORNBFIas: "POWER OF THE BANGKO SENTRAT TO EXAMINE TRUST CORPOMTIONS" 5 4001T Examination by the Bangko Sentral. The Bangko Sentral ng Pilipinas (Bangko sentral) shall have supervision over, and conduct periodic or special examination of trust corporation (TC). XXX XXX XXX,, section 5. subsections 4103T.1, 4L26T.L, 44o2T of the MORNBF| are amended to read as follows: "5 4103T.1 Basic Guidelines in Establishing TCs. No person or entity shall be allowed to operate as a TC without prior authority from the Bangko Sentral. a. Organizational requirements. xxx xxx xxx Requirements for the issuance of the certificates of authority to register and to operate. (1) xxx xxx xxx xxx xxx xxx (4) Within six (6) months from receipt of advice of approval by the Monetary Board of their application for authority to establish a TC, the incorporators shall secure the certificate of authority to operate the trust, other fiduciary business and investment management activities and submit to the appropriate supervising and examining department of the Bangko Sentral the following: xxx xxx xxx" '5 4126T.l Limits of stockholdings in o single fC. The stockholdings in any TC shall be subject to the limits as prescribed below: a. Domesticstockholders xxx xxx xxx

b. Foreign stockholders may own stockholdings in a TC, subject to the limits as stated below: (1) xxx xxx xxx XXX XXX XXX (1) others, such as individuals and other entities not identified above x x x The limits as stated above are further subject to the limits imposed by the respective laws/regurations in the home country of investing companies or country of origin. xxx xxx xxx" "sec.44o2T Applicable Regutations on Trust and other Fiduciary Activities.xxx xxx xxx A. XXX XXX XXX XXX XXX XXX j. Section 4499Q Sanctions (For this purpose the guidelines for the imposition of monetary penalty as shown under Appendix I-2 shall be used by TCs)" section 6. The references to subsec. X3o1.6a and 6b in ltem ,,v,, of Appendix 48 of the MORB are changed to Subsection X17g.9. Section 7. The references to the guidelines on risk management for derivatives under Appendix 25 {Risk Management Guidelines for Derivatives) in Sections X175 and X176 of the MORB are deleted Section 8- The introduction in Appendix 25 of the MORB is amended to read as follows: "1. Introduction This appendix, together with the Guidelines on supervision by Risk (Appendix 721, Market Risk Management under xL7s, Liquidity Risk Management under xL76, and other BSp issuances on management of the different risks attendant to banking activities, provides a framework

t, on which a bank can establish its risk management activities. Accordingly, this set of risk management guidelines for derivatives should be read and used in conjunction with all related BSP issuances on risk management. xxx xxx xxx" Section 9. ltems C and D of the topic titles in Part Nine (lX) of the MORB are changed to ltems D and E. Section 10. The reference to Subsec. 444LN.62 in Appendix 68/Q-38 of the MORB/MORNBFI, Section 8 in Circular No. 873 dated 25 March 2015 is changed to Subsec.4144N.6. Section 11. The Transitory Provisions of Circulars issued in 2015 are footnoted in the sections/subsections of the MORB/MORNBFI. Circular No. Sections/Subsections 873 x44t 886 x321,43375 Section 12. The following memoranda are codified in the MORB. Memorandum Title Section/Subsection/ Appendix 5 Regulatory Relief for Banks/Non-Bank 01.20.15 Financial Institutions with Quasi- Banking Functions (NBQBs) Affected by Typhoon "Ruby" x257, X302, X306, 9 Regulatory Relief for Banks/Non-Bank x338, XLg2.2, 01.28.1s Financial Institutions with Quasi- X259.5, X269.8 and Banking Functions (NBQBs) Affected by App. 18 Tropical Storm "Seniang" 35 Regulatory Relief for Banks Affected by 10.07.15 Typhoon "lneng" 8 Strengthening Program for Rural Banks App.94a 01.28.1s (SPRB)Plus Section 13. The following sections/subsections/appendices are updated to reflect the changes in the reportorial requirements and annual supervisory fees as contained in the following Memorandum to All Banks:

Memorandum No. Sections/Su bsbctions/Rppe nd ices 001 App.6 004 App.6 oL4 App.6 015 App.5 ozL App.6 o22 X901.1, App. 88, 4901Q.1 and App. e-Sf 026 App.6 028 App.6 o29 App.6 030 App.6 031 App.6 032 App.6 033 App.6 034 X907.6, App.6 035 App.6 FOR THE MONETARY BOARD: Y r"Aru^ry2eL6