ELECTRONIC Money Issuers (EMI) are now required to maintain higher liquidity and capital requirements to promote their resilience and better protect the interests of electronic money account holders, according to the Bangko Sentral ng Pilipinas (BSP).
The Monetary Board approved the amendments to the guidelines which now require EMIs monthly outstanding E-money balance of at least P100 million to maintain liquid assets in trust accounts equivalent to at least 50 percent of their outstanding E-money balance.
They are also now required to cover the remaining balance with placements in bank deposits, government securities, or other liquid assets acceptable to the BSP.
“The amendments are geared towards equipping EMIs in attending to the evolving needs and behaviors of consumers and in responding to the existing and emerging risks in the financial sector, such as cybersecurity and money laundering,” BSP Governor Felipe M. Medalla said.
The BSP added that EMIs with outstanding E-money balance below P100 million may continue to comply with the liquidity requirements by holding eligible liquid assets.
EMIs shall be given one year from the effectivity of the revised regulations to comply.
“The revised guidelines reaffirm the BSP’s commitment to uphold the welfare of Filipinos by promoting a safe, secure, and inclusive financial system,” Medalla said.
Capital requirements
MEANWHILE, BSP said the new rules set out higher minimum capital requirements for EMIs with large-scale operations recognizing the higher risk exposures of said entities.
The issuance defines large-scale EMIs as those with 12-month average value of aggregated inflow and outflow transactions equal to or greater than P25 billion.
Under the guidelines, large-scale EMIs are required to maintain a minimum capital of P200 million while the minimum capital requirement for small-scale EMIs is P100 million.
Consistent with the application of the risk-based principle, the BSP lifted the P100,000 monthly aggregate load limit and now allows EMIs to set predefined limit and threshold per client category based on the results of their institutional risk assessment and customer due diligence process.
The amendments also simplified the classification of EMIs into two categories: (a) EMI-Banks; and (b) EMI Non-Bank Financial Institutions (EMI-NBFI), wherein the latter may include cooperatives. EMIs previously classified as EMI-Others will be grouped under EMI-NBFI.
The guidelines likewise expanded the definition of E-money to include those that may be transferred to other accounts as compared with earlier regulations limiting it to only those withdrawable in cash or cash equivalent.
In addition, the new rules broadened the acceptability of E-money to include merchants and issuers using the same mobile application.