Revised forex regulations issued by BSP

Monetary authorities have tightened regulations covering the reporting of foreign exchange (FX) transactions and also revised penalty provisions to ensure accountability by covered financial institutions.

Circular 1197, issued by the Bangko Sentral ng Pilipinas (BSP) last July 12, detailed changes to the Manual of Regulations on Foreign Exchange Transactions (FX Manual) that were approved by the policymaking Monetary Board during a July 4 meeting.

«Reports submitted to the BSP… should be complete, accurate, consistent, reliable and timely to be considered compliant with the BSP reporting standards,» the circular states.

Penalties will be imposed depending on whether reports are erroneous, delayed, are both, or are not submitted. The amounts to be paid will also be based on the type of financial institution, with the lowest for representative offices and the highest for universal, commercial, and Islamic banks.

A maximum penalty of P1 million will be imposed for each transactional violation or P100,000 per day for continuing violations.

Failure to submit a report on time due to fortuitous events such as natural disaster will not be considered willful noncompliance.

Other changes detailed in the circular included authorized/covered transactions, FX cover requirements and risk management, FX forwards and swaps, and revisions, additions and deletions to annexes of the FX Manual.

Covered entities were given up to the end of this year to prepare and adjust their systems and processes to comply with the new guidelines.

«This transitory period shall be treated as an observation period to give reporting entities [a] reasonable amount of time prior to full implementation on 01 January 2025,» the circular states.

The just-issued circular will take effect 15 days after publication in the Official Gazette or a general-circulation newspaper.