THE BANGKO SENTRAL ng Pilipinas (BSP) is looking to enhance its guidelines on its supervised financial institutions’ (BSFIs) reporting governance frameworks, including changes to sanctions and penalties for violations of its standards.
The Monetary Board is seeking to amend its rules covering firms’ reporting governance framework in the Manual of Regulations for Banks (MORB), based on a draft circular posted on the BSP’s website.
“The Bangko Sentral espouses data-driven decisions to effectively deliver its mandate of promoting financial stability. In this respect, the Bangko Sentral expects its BSP-supervised financial institutions to implement a sound reporting governance framework that promotes the integrity, accuracy, and timeliness of prudential reports submitted,” it said.
The central bank said BSFIs’ reporting governance frameworks must outline “the policies, expectations, as well as systems and resources necessary to generate complete, accurate, timely, and adaptable reports submitted to the Bangko Sentral and used by BSFI management in defining strategies, managing risks, and making decisions.”
A BSFI’s board of directors shall be responsible for establishing a reporting governance framework and overseeing its implementation, it said.
Under the draft rules, a BSFI’s framework must include board-approved policies that define the roles and responsibilities of their personnel in ensuring the quality of their prudential reports, including data collection, validation and submission, as well as governance processes for reporting issues.
It should also have “well-documented standards, policies and procedures” for the validation, review, approval and submission of reports; the reporting of “significant or unusual transactions, events, or activities” that could have a material impact on the quality of their reports; and keeping backup copies of essential business information, software and other relevant documents needed for the restoration of critical operations, among others.
The framework should also include a management information system, data architecture, and technology infrastructure that is “commensurate with the nature, scope, operational complexity, and systemic importance of the BSFI’s business activities” and can leverage technology and data analytics to support changes in reporting requirements and facilitate the production of quality reports.
The BSP said under its reporting standards, regulatory reports must be complete, accurate, timely, and adaptable.
Under the draft, monetary penalties for non-compliance with the BSP’s reporting standards will be based on the asset size of BSFIs. Current rules base these fines on the type of bank.
“A prudential/regulatory report that does not meet the reporting standards set out by the Bangko Sentral shall be subject to a penalty imposed for each calendar day that a violation is incurred, until such time that the report has been determined compliant with the standards,” the central bank said.
“In addition to the continuing monetary penalties that shall be imposed on BSFIs for reporting violations, non-monetary sanctions on the BSFI, its directors, officers, and personnel as provided under existing laws and regulations may be imposed,” it added.
If the draft circular is approved, it shall apply to reports falling due beginning January 2025. — L.M.J.C. Jocson
