Bangko Sentral to tighten trust industry supervision
Eli Remolona Jr. —INQUIRER FILE PHOTO
MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) wants trust companies to meet supplemental data requirement (SDR) in a bid to enhance the supervision and surveillance of such asset management entities.
The BSP is collecting comments from stakeholders on a draft circular that would introduce the SDR, which would complement the data that trust entities currently submit to the central bank under the existing Financial Reporting Package for Trust Institutions (FRPTI).
Trust companies act as agents or trustees on behalf of a person or company. Some of them offer wealth management services.
In the Philippines, the trust industry developed as an appendage of the banking system, but some have spun off their trust businesses into standalone companies. Some are affiliated with insurance firms while others are independent entities.
Although funds placed with trust entities are not insured by the Philippine Deposit Insurance Corp., the central bank regulates the industry to make sure they adhere to fiduciary duties and responsibilities and maintain sufficient liquidity.
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Pilot implementation
The central bank said the goal of the proposed SDR is to eventually incorporate the data requirements into the enhanced FRPTI. Once the circular is approved, the BSP said there would be a pilot implementation covering the June 30, 2025, reference quarter.
Thereafter, all trust entities must submit the SDR on a quarterly basis until the enhanced FRPTI is issued.
Among the supplemental data that trust entities must report to the BSP are the number of accounts opened and closed during a quarter, and the distribution channels of products. Trust companies must also submit information that categorizes the risk profile of their clients.
The SDR will also ask for more granular information on unit investment trust fund structures; and trust and agency accounts not specifically identified under the FRPTI.
“Further guidelines on the mode and manner of submission of the SDR shall be covered by a separate issuance,” the draft document read.
“It is the BSP’s objective to continually enhance the supervisory framework for trust entities and strengthen the monitoring and surveillance of the trust industry through improved regulatory reporting,” it added.
The SDR will be submitted through the BSP Prime Reporting Innovation and Monitoring Engine or “PRIME system” and shall be due within 30 banking days from the end of each reference quarter.
Stakeholders have until June 2 to send their comments on the draft circular to the BSP.
