Amendments to the Basel III Leverage Ratio Framework

BANEKo SexrnaL NG PILIPINAS OFFICE OF THE GOVERNOR ctRcurAR No. 990 Series of 2018 Subject: Amendments to the Basel lll Leverage Ratio Framework The Monetary Board, in its Resolution No. 22 dated 5 January 20L8, approved the extension of the monitoring period of the Basel lll Leverage Ratio Framework amending SubsectionsXlL5.6/4115Q.6 and Appendices L11./Q-65 of the Manual of Regulations for Banks/Manual of Regulations for Non-Bank Financial lnstitutions (MORB/MORNBFI). Section 1. Subsections X115.6/4LLSQ5 on Basel lll Leverage Ratio Framework of the MORB/MORNBFI are hereby amended to read, as follows: "Subsec. XI!,5,6l4n5q.6 Bosel lll Leverage Rotio Framework. a. Minimum requirement. The Basel lll Leverage Ratio is designed to act as a supplementary measure to the risk-based capital requirements. x x x XXX Starting 31 December 20t4 and every quarter thereafter until 30 June 2018, banks/QBs concerned shall submit the Basel lll Leverage Ratio reporting template, including required disclosure templates, on both solo and consolidated bases for monitoring purposes. The report submission is summarized below: Report Date Reference Date Deadline of Submission Fifteen (15) banking/ 30 September 2017 3l- December 2O77 business days from end of 31 December 20L7 reference date on solo basis, and 31 March 2018 3l- March 2018 Thirty (30) banking/business 30 June 2018 30 June 2018 days from end of reference date on consolidated basis During the monitoring period, public disclosure of information relative to leverage ratio shall not be required. The monitoring of the leverage ratio shall be implemented as a pillar 1 minimum requirement effective on 01 July 2018. Upon migration to a Pillar 1 requirement, the Basel lll Leverage Ratio report shall be submitted quarterly along with the Basel lll CAR report on both solo and consolidated bases. The mandatory disclosure requirements provided under Appendix 771/ A. MabiniSt., Malate 1004 Manila, Philippines o (632)708-770L o www.bsp.gov.ph

Q-65 of the MORB/MORNBFI shall be published in the quarterly published balance sheet as well as in the annual reports or published financial reports (e.g., audited financial statements). b. Sonctions. Banks/Qgs shall not be penalized on any breach on the five percent (5%l minimum leverage ratio during the monitoring period. However, erroneous, delayed, erroneous and delayed, or unsubmitted reports of banks shall be subject to penalties provided under Subsec. X184.3 of the MORB. In the case of QBs, late and/or erroneous reports shall be subject to penalties under Subsec. 4L92Q.2 of the MORNBFI. The reports shall be classified as a Category A-7 reporl." Section 2. Section B of Appendices 111/Q-65 on the Guidelines on the lmplementation of the Basel lll Leverage Ratio Framework of the MORB/MORNBFI are hereby amended to read, as follows. B. Reporting and disclosure requirements Starting 31 December 2OI4 and every quarter thereafter until 30 June 2018, banks/QBs concerned shall submit the Basel lll Leverage Ratio reporting template on both solo and consolidated bases for monitoring purposes. The report shall use the prescribed forms and shall be submitted to the appropriate department of the SES. The report submission is summarized below: Report Date Reference Date Deadline of Submission Fifteen (15) banking/ 30 September 2077 31 December 2077 business days from end of 31 December 2Ot7 reference date on solo basis, 3l March 2018 31 March 2018 and Thirty (30) banking/business 30 June 2018 30 June 2018 days from end of reference date on consolidated basis Upon migration to a Pillar L minimum requirement effective on 0l July 2OL8, the Basel lll Leverage Ratio report shall be submitted along with the Basel lll CAR report. xxx The public disclosure requirements shall be made either through inclusion of the requirements in the bank's/QB's annual reports or published financial statements that are posted in the banksTQBs'websites. An ongoing archive of all the reconciliation templates, disclosure templates and explanatory tables relating to prior periods must be made available by banks in their website. All disclosures must be made according to the defined templates. xxx"

Section 3. Effectivity. This Circular shall take effect fifteen (15) calendar days following its publication either in the Official Gazette or in a newspaper of general circulation. FOR THE MONETARY BOARD: Governor Lb January 20L8