Adopted: 22 May 2015
Date Filed: 01 June 2015
The Monetary Board in its Resolution No. 509 dated 27 March 2015 approved the introduction of Appendix 34a to Subsec. X405.1 of the Manual of Regulations for Banks (MORB) and Appendix Q-21-a to Subsec. 4405Q.1 of the Manual of Regulations for Non-Bank Financial Institutions (MORNBFI), relative to the implementation of PERA Act of 2008 and PERA Rules.

Definition of Terms and Acronyms

BSP - Bangko Sentral ng Pilipinas

BSP-FAD - Financial Accounting Department of the BSP

BSP-SES - Supervision and Examination Sector of the BSP

DDA - refers to the regular demand deposit account of a bank/quasi-bank with BSP-FAD

DSSA - Daily Statement of Securities Account

Financial Institution (Fl) - refers to a bank, non-bank financial institution, or trust entity supervised by the BSP that is accredited to be a PERA Administrator

MORB/MORNBFI - Manual of Regulations for Banks/Manual of Regulations for Non-Bank Financial Institutions

Off-site Supervising Department - refers to the department of the BSP-SEs responsible for offsite supervision of Fls

Scripless securities - refers to uncertificated securities issued by the Bureau of

Treasury (BTr) that are under the BTr ™s Registry of scripless securities (Ross)

Trust Specialist Group (TSG) - refers to the technical unit of the BSP-SES

responsible for supervision of trust entities

A. Basic Requirements

1. The BSP-SES shall file with the BTr an application to open a BSP-PERA RoSS principal securities account where the securities for the faithful performance of PERA Administrator shall be held. The BSP-SES shall use Annex 1 for this purpose.
   
2. The BSP-SES through its TSG shall request with the BTr the creation of a PERA Administrator securities account under the BSP-PERA RoSS principal securities account using Annex 1-A. The BTr shall maintain each PERA Administrator securities account for P1,000.00 or any amount per month as may be determined by the BTr.
   
3. An Fl must have a DDA with BSP-FAD. In case when an Fl does not have a DDA with BSP-FAD, it shall designate a settlement bank and shall inform the appropriate BSP-SES off-site supervising department of its designated settlement bank.
   
4. Each Fl shall accomplish an autodebit/autocredit authorization for its PERA Administrator securities account under the BSP-PERA RoSS principal securities account. The document shall authorize the BTr and the BSP to credit the DDA of the FI or the designated settlement bank with BSP-FAD for coupons/interest payments and maturity proceeds of securities and to debit the same DDA for the monthly fees payable to the BTr for maintenance of the PERA Administrator securities account. An Fl with a DDA with BSP-FAD shall use Annex 2-A while an FI with a settlement arrangement shall use Annex 2-B.
   
5. The BSP-SES off-site supervising department shall be responsible for monitoring deposit and withdrawal of securities in the PERA Administrator securities account.
   
6. Every Fl shall ensure that it has adequate security for the faithful performance of PERA Administrator pursuant to the provisions of the Personal Equity and Retirement Account (PERA) Act of 2008 and its implementing rules and regulations.
   
7. The BTr shall provide TSG a monthly statement of securities account as well as a DSSA whenever a transaction in any PERA Administrator securities account is made.
   
8. The responsible BSP-SES off-site supervising department shall determine on a quarterly basis the compliance with the security for the faithful performance of PERA Administrator based on the reportorial submission of the Fl. In case of deficiency, the responsible BSP-SES off-site supervising department shall recommend, as warranted, the imposition of sanctions and/or any other appropriate action to higher BSP authorities.

B. Procedures for Assigning Initial/Additional RoSS Securities as Security for the Faithful Performance of PERA Administrator

1. The Fl shall notify the appropriate BSP-SES off-site supervising department that it will transfer RoSS securities to its PERA Administrator securities account at least two (2) banking days before the date of transfer using the prescribed form (Annex 3) and checking Box œA  or œB , as appropriate, and indicating details therein. The notice, which may initially be sent through electronic mail or fax, shall be forwarded as an official letter duly signed by authorized officer/s and shall be accompanied by the following:
   
   
   1. Computation of compliance with the security for the faithful performance of PERA Administrator. The Fl shall provide detailed calculation on specific and relevant dates whenever there is a transfer of RoSS securities to and from its PERA Administrator securities account using Annexes 4 and 4-a to affirm the continuing compliance with the security requirement; and
      
      
   2. Notarized certification signed by the chief executive officer of the Fl using Annex 5 attesting:
      
      
      1. The accuracy and completeness of submitted reports and corresponding schedules; and
         
      2. The effective interest rate method is being used in the amortization of relevant premium/discount of securities in compliance with the Philippine accounting standards.
         
      
      This notarized certification shall likewise be submitted to the appropriate BSP-SES off-site supervising department every quarter to attest the continuing compliance of the Fl to the security requirement.
      
   
   
2. The Fl shall instruct the BTr to transfer RoSS securities to its PERA Administrator securities account on specified date.
   
3. The BTr shall effect the transfer upon verification of RoSS balances. At the end of the day, the BTr shall transmit a DSSA to TSG containing the transfer.
   
4. The TSG shall provide the appropriate BSP-SES off-site supervising department a copy of the DSSA.
   
5. The responsible BSP-SES off-site supervising department shall verify from the DSSA the transfer of securities indicated in the advice (Annex 3) sent earlier by the Fl.
   
6. The above procedures shall also be observed in transferring additional securities to replace maturing/matured RoSS securities.

C. Procedures for Withdrawing RoSS Securities

1. The Fl shall notify the appropriate BSP-SES off-site supervising department that it will withdraw existing RoSS securities assigned as security for faithful performance of PERA Administrator at least two (2) banking days before the date of withdrawal using the prescribed form (Annex 6) and indicating the details of the securities to be withdrawn. The notice shall be accompanied by a computation of compliance with security requirement and certification required under B.1.
   
2. The responsible BSP-SES off-site supervising department shall verify if the securities to be withdrawn are in the PERA Administrator securities account and the value of outstanding securities remains compliant with the security requirement after the withdrawal. The department concerned shall immediately inform the Fl for any discrepancy/deficiency. If in order, the department concerned shall authorize TSG to instruct the BTr to transfer the securities to be withdrawn to the RoSS account of the Fl. The BSP-SES off- site supervising department shall use Annex 7 and check boxes œB  and œC . The authority to allow the withdrawal should be transmitted to TSG one (1) banking day before the date of withdrawal indicated in the advice (Annex 6) sent earlier by the Fl. The BSP-SES off-site supervising department shall also advise the Fl that it has approved the withdrawal of security using Annex 8 and checking boxes œB  and œC .
   
3. The TSG shall instruct the BTr within the same day to transfer the securities specified to be withdrawn from the PERA Administrator securities account to the RoSS account of the Fl using Annex 9. The BTr shall acknowledge receipt of the confirmation of transfer of government securities (sans consideration).
   
4. The BTr shall effect the transfer/withdrawal and shall send a DSSA to TSG containing the transfer/withdrawal.
   
5. The TSG shall provide the appropriate BSP-SES off-site supervising department a copy of the DSSA.
   
6. The responsible BSP-SES off-site supervising department shall verify from the DSSA the transfer of securities indicated in the advice (Annex 6) sent earlier by the Fl.
   
7. The above procedures shall also be observed in withdrawing and replacing existing and/or maturing/matured RoSS securities.

D. Procedures for Replacing RoSS Securities

1. The Fl shall notify the appropriate BSP-SES off-site supervising department that it will replace existing and/or maturing/matured RoSS securities assigned as security for the faithful performance of PERA Administrator at least two (2) banking days before the date of replacement using the prescribed form (Annex 3). The Fl shall check box œC  of the form and indicate the details of the securities to be replaced. The notice shall be accompanied by a computation of compliance with security requirement and certification required under B.1.
   
2. The responsible BSP-SES off-site supervising department shall verify if the securities to be replaced are in the PERA Administrator securities and the value of the outstanding securities remains compliant with the security requirement after the replacement. The department concerned shall immediately inform the Fl for any discrepancy/deficiency.
   
3. The procedures for assigning additional RoSS securities specified in sections B.2 to B.5 of this Appendix shall herein apply.
   
4. The BSP-SES off-site supervising department shall use Annex 7 and check boxes œA  and œC . Should there be any discrepancy/deficiency, the BSP- SES off-site supervising department shall immediately inform the Fl. The authority to allow the replacement shall be transmitted to TSG not later than the day when the replacement securities were transferred to the PERA Administrator securities account.
   
   The BSP-SES off-site supervising department shall also advise the FI that it has approved the replacement of security by using Annex 8 and checking boxes œA  and œB .
   
   
5. The procedures for withdrawing RoSS securities specified in sections C.3 to C.6 of this Appendix shall herein apply.

E. Procedures for Crediting Interest and Maturity Proceeds of Securities

1. On coupon or interest payment date, the BTr shall instruct BSP-FAD to credit the DDA of the Fl or its designated settlement bank for coupon/interest payment of securities held in the PERA Administrator securities account.
   
2. On maturity date, the BTr shall instruct BSP-FAD to credit the DDA of the Fl or its designated settlement bank for maturity proceeds of securities held in PERA Administrator securities account.
   
3. The appropriate BSP-SES off-site supervising department shall determine if the value of the outstanding securities remains compliant with the security requirement after the maturity of securities. The department concerned shall immediately inform the Fl for any discrepancy/deficiency.
   
4. When the value of security falls below the required level, the Fl shall instruct the BTr to transfer securities from the Fl ™s own RoSS account to its PERA Administrator securities account under the BSP-PERA RoSS principal securities account. The procedures specified in sections B.1 to B.5 of this Appendix shall herein apply.

This Circular shall take effect fifteen (15) days following its publication in the Official Gazette or in any newspaper of general circulation.

For the Monetary Board:

(SGD) AMANDO M. TETANGCO, JR.
Governor