Philippines insurance firms to enter the securities lending market
18 September 2019 Manila
Image: Shutterstock
The Philippines' Insurance Commission (IC) has permitted insurance companies to engage in securities lending for the first time, with immediate effect.
The IC issued a circular letter providing guidelines for lending transactions this month, which stated that securities listed in the Philippine Stock Exchange, issued by the Bureau of the Treasury, or by the Philippines central bank are now eligible to be borrowed.
For modes of conducting securities lending, it was explained that for an insurance/reinsurance company, securities lending may be conducted through direct lending, lending agent, lending pool systems or other schemes subject to the evaluation and approval of IC.
In terms of loan tenor, the IC confirmed that the borrowing period must not exceed two years from the date of execution.
Collateral can be offered in either peso or securities listed in the Philippine Stock Exchange.
Elsewhere, the letter read: “The borrowed and collateral securities must be marked-to-market at least once daily, based on the valuation method as indicated by the parties in the Master Securities Lending Agreement. ln the absence of such agreement, the valuation shall be based on the current market price.”
The IC issued a circular letter providing guidelines for lending transactions this month, which stated that securities listed in the Philippine Stock Exchange, issued by the Bureau of the Treasury, or by the Philippines central bank are now eligible to be borrowed.
For modes of conducting securities lending, it was explained that for an insurance/reinsurance company, securities lending may be conducted through direct lending, lending agent, lending pool systems or other schemes subject to the evaluation and approval of IC.
In terms of loan tenor, the IC confirmed that the borrowing period must not exceed two years from the date of execution.
Collateral can be offered in either peso or securities listed in the Philippine Stock Exchange.
Elsewhere, the letter read: “The borrowed and collateral securities must be marked-to-market at least once daily, based on the valuation method as indicated by the parties in the Master Securities Lending Agreement. ln the absence of such agreement, the valuation shall be based on the current market price.”
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