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BSA Assignment 8 - FIN - 1

My learnings from today's lesson are about the requirements and regulations for non-bank financial institutions in the Philippines, including financing companies, fund managers, lending investors, and venture capital corporations. Financing companies must comply with licensing requirements and laws, and are subject to limits on fees and charges set by the Monetary Board. Their registration can be revoked if they become insolvent or violate relevant laws. Minimum capital requirements vary depending on the location of a financing company's head office. Fund managers, lending investors, and venture capital corporations also have specific rules regarding their organization, functions, and investments.

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44 views2 pages

BSA Assignment 8 - FIN - 1

My learnings from today's lesson are about the requirements and regulations for non-bank financial institutions in the Philippines, including financing companies, fund managers, lending investors, and venture capital corporations. Financing companies must comply with licensing requirements and laws, and are subject to limits on fees and charges set by the Monetary Board. Their registration can be revoked if they become insolvent or violate relevant laws. Minimum capital requirements vary depending on the location of a financing company's head office. Fund managers, lending investors, and venture capital corporations also have specific rules regarding their organization, functions, and investments.

Uploaded by

Angelica Zapanta
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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De Guzman, Angelica R.

BSA Assignment #8

Question:

What are your learnings in today’s lesson?

Answer:

What I learn today is about financing companies and other non-bank institutions. They
need to comply with the requirements and licensing wherein all the requirements of existing laws
to engage in the business for which the applicant is proposed to be incorporated or organized
have been complied with; the organization, direction, and administration, as well as the integrity and
responsibility of the organizers and administrators reasonably assume the protection of the interest of
the general public; and all the requirements of this Act have been complied with.

There is limitation on purchase discount, fees, services, and other charges which is the
Monetary Board of the Bangko Sentral is empowered, in consultation with the Securities and
Exchange Commission, to prescribe the maximum rate or rates of purchase discounts, fees,
service and other charges of financing companies, and to change, eliminate or grant exemptions
from or suspend the effectivity of such rate(s) whenever warranted by prevailing economic and
social conditions.

The registration of any financing company may be revoked or suspend if upon


investigation into the affairs of said financing company or complaint by any person, it appears
that:

 It is insolvent
 It has violated any provision of Republic Act No. 5980

The minimum required paid-in capital is: Ten Million Pesos (PHP10,000,000.00) for the
head office in Metro Manila and other first class cities. Five Million Pesos (PHP5,000,000.00) in
other classes of cities. Two Million Five Hundred Thousand Pesos (PHP2,500,000.00) in
Municipalities.

There are other non-bank financial institutions like a fund manager or financial manager
refers to a bank or a non-bank financial institution performing quasi-banking functions engaged
in the business of administering and managing the property or money or its equivalent as agent
or representative of the owner or of a third person. In actual practice, a fund manager may be a
bank, an investment house, an investment company, a finance company, or a corporate securities
dealer or broker entrusted to administer and manage properties belonging to other parties. A fund
manager must be a corporation, and as such, it is organized by at least five but not more than
fifteen incorporators. The other type of funds being managed by the fund manager comes from
outsiders, which partake of the nature of trust funds entrusted under the care of the bank's trust
department.
De Guzman, Angelica R.

A lending investor is a person, partnership, or corporation licensed and/or registered with


the SEC and the BS as a non-bank financial institution performing any or all the following
functions on a regular and recurring basis.
 Receive funds from one group of persons, regardless of number, through traditional
deposits (demand, time, and savings), or issuance of debt and equity securities; and make
available or lend these funds to another person or entity, and in the process acquired debt
and equity securities.
 Use principally the funds received from acquiring various types of debt or equity
securities.
 Borrow against, or lend on, or buy or sell debt or equity securities.
 Hold assets consisting principally of debt or equity securities, such as promissory notes,
bills of exchange, mortgages, stocks, bonds, and commercial papers.
 Realize income on a regular basis in the nature of, but need not be limited to, interest,
discounts, capital gains, underwriting fees, guarantees, fees, commissions, and service
fees, principally from transactions in debt or equity securities or by being a go-between
of suppliers and users of funds.

And Lastly the Venture Capital Corporation wherein organized by virtue of Presidential
Decree No. 1688 dated April 3, 1980 to assist small- and medium scale industries. A small- and
medium-scale industry is one with total assets not exceeding P4 million. The initial paid-in
capital of a venture capital corporation shall not exceed P5 million.

Investments of a venture capital corporation in the shares of stock of small- and medium-
scale enterprises are subject to the following conditions:

 Investments are limited to the shares of stock of those enterprises engaged in an


industry certified as desirable by the Secretary of Trade and Industry.
 The total assets of the enterprise, including the investments of the venture capital
corporation, do not exceed P4 million.

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