The Bangko Sentral ng Pilipinas (BSP) is seeking to enhance transparency in financial derivatives transactions by amending regulations governing the activities of banks, quasi-banks, and trust corporations, as well as the rules for unit investment trust funds, with industry players invited to submit feedback and recommendations before final approval.
In the proposed changes, the BSP is suggesting that banks can engage in certain financial derivatives without prior approval, particularly those traded in organized markets where the bank is recognized as a dealing participant or member. However, they would need to notify the central bank if they plan to transact structured products, which differ from previously approved offerings.
Additionally, the BSP is amending guidelines for unit investment trust funds (UITFs) using financial derivatives. UITFs would need to disclose the purpose and method of determining exposure to financial derivatives, which should align with the fund’s objectives. This is part of the BSP’s efforts to promote transparency and risk management within the financial sector.
This comes after the BSP recently approved guidelines on using benchmarks for assessing UITF returns, further improving the framework for financial products and investments in the Philippines.
