The Bangko Sentral ng Pilipinas (BSP) has issued standardized reporting requirements for operators of payment systems (OPS) and also required periodic independent reviews of such reports.
Approved on March 1, Circular 1138 is authorized by the National Payment Systems Act, which allows the BSP to oversee and ensure the efficiency, safety, and reliability of the payments system, the central bank said. It also laid down penalties and sanctions for violations of the reporting standards.
“This recent policy issuance is critical to the BSP’s determination of appropriate oversight interventions, formulation of responsive policies and regulations, as well as continuous development of the national payments system,” BSP Governor Benjamin E. Diokno said in a statement Friday.
The mandatory reports relate to operations, including information needed by regulators for statistical, policy development, and supervisory purposes.
OPS companies are also required to have a reporting system in place in times of emergency or weather disruptions that could affect the processing of transactions.
The periodic independent review clause seeks to ensure reliability and effectiveness of the reporting, condicuted via either an internal auditor or an external party with expertise in information technology, data management, and regulatory compliance.
“The appropriate frequency of such review shall mainly depend on the systemic importance, risk profile and business complexity of the OPS as well as the extent of recurrence of control weaknesses that cause reporting exception,” the BSP said.
The BSP said OPS companies should retain their data and reports for at least five years. In cases where a financial institution becomes subject to investigation by the BSP for possible criminal, administrative or civil cases, relevant information will have to be preserved beyond five years until a final verdict has been reached.
Penalties for erroneous, delayed, and unsubmitted primary reports can range from P300 to P3,000 depending on the type of financial institution. Meanwhile, violations committed in connection with secondary reports will draw fines of P60 to P600.
“The penalties will accumulate until such time that the report has been determined compliant with the prescribed reporting standards,” the BSP said.
Possible non-monetary sanctions including a first offense warning to top officials of the OPS company and a reprimand for the Chief Executive Officer (CEO) and the board for a second offense.
For a third offense, the CEO may be issued a suspension order of between a month and a year depending on the gravity of the violation. The top official and members of the board may also be disqualified from the industry for further offenses and the Monetary Board will have the power to designate a manager to take over the operations.
According to the BSP, 198 companies have obtained an OPS certificate of registration. – Luz Wendy T. Noble