Amendment on Risk Disclosure Requirements on Loss Absorbency Features of Capital Instruments

February 14, 2014BSP CIRCULAR NO. 826-14SUBJECT : Amendment on Risk Disclosure Requirements on Loss Absorbency Features of Capital InstrumentsThe Monetary Board, in its Resolution No. 109 dated 16 January 2014, approved the amendments to the risk disclosure requirements on loss absorbency features as provided in Circular No. 786 dated 15 February 2013, which clarify the applicability of the risk disclosure requirements with regard to the place of issuance of capital instruments. The Manual of Regulations for Banks/Non-Bank Financial Institutions particularly Appendix 63b/Q46b, respectively, are hereby amended as follows: SECTION 1. The risk disclosure requirements on loss absorbency features as provided in Circular No. 786 including amendments thereto shall be incorporated in Appendix 63b/Q46b of the MORB/MORNBFI as Annex G — Risk Disclosure Requirements on Loss Absorbency Features, which shall now read as:"Risk Disclosure Requirements on Loss Absorbency Features of Capital InstrumentsI. When marketing, selling and/or distributing Additional Tier 1 and Tier 2 instruments eligible as capital under the Basel III framework, in the Philippines, banks/quasi-banks must:1. Subject investors to a client suitability test to determine...