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MANILA - President Rodrigo R. Duterte has signed an administrative order (AO) that directs all non-bank government entities to formulate investment governance frameworks for foreign exchange (FX) derivatives transactions. AO 28, signed by Duterte on May 24, was released on Thursday. "There is a need to institute sufficient monitoring safeguards and risk management mechanisms in FX derivatives transactions to protect the National Government's fiscal and economic interests in non-bank government entities," the AO read. Under the AO, the regulation of FX derivatives transactions of non-bank government entities supports the objective to configure the country's public sector debt profile, such that government debt involves extended maturities, and ensures an optimum mix of currencies, to minimize the impacts of drastic currency movements. The Department of Finance (DOF) will oversee "all FX derivatives activities of all non-bank government entities, including government-owned or -controlled corporations (GOCC) such as, but not limited to, the Government Service Insurance System, Social Security System, Home Development Mutual Fund, and Philippine Health Insurance Corporation, as well as other government entities not regulated by the Bangko Sentral ng Pilipinas." The AO states that all covered entities must formulate their respective Investment Governance Frameworks, to be approved by the Board of Directors or Trustees, or the Head of Agency. All Investment Governance Frameworks will be submitted to the DOF for approval. The Secretary of Finance may disapprove or defer approval of Investment Governance Frameworks on the ground of non-compliance with the requirements under the implementing guidelines to be issued under this Order, provided that the covered entity concerned will be given an adequate opportunity to comply, and/or to address the concerns relative to its submission. Covered entities must submit to the DOF at the end of every quarter a report on FX derivatives outstanding, a mark-to-market valuation report, if applicable, and such other reports as may be required under the Implementing Guidelines to be formulated pursuant to this order. To evaluate and analyze the impacts of such FX derivatives transactions on the financial exposure of the government, such reports must be included in the GOCC's Liabilities and Processing Tool of the DOF, as may be appropriate. The Secretary of Finance must promulgate implementing guidelines, which must include, among others, the content of the Investment Governance Frameworks of covered entities within 60 days from the effectivity of the order. Covered entities that have executed FX derivatives transactions prior to the issuance of this order are given 45 days from the issuance of the implementing guidelines to submit to the DOF their respective Investment Governance Frameworks, as well as the required reports on FX derivatives outstanding. Derivatives are contracts between two or more parties, which derive its value on an agreed-upon underlying financial asset, index, or security, such as bonds, commodities, currencies or stocks. (PNA) }

Related Keywords

Government Service Insurance System ,Laguna ,Philippines ,Manila ,Philippine ,Benguet ,Bangko Sentral ,Rodrigor Duterte ,Head Of Agency ,Home Development Mutual Fund ,Department Of Finance ,Philippine Health Insurance Corporation ,Board Of Directors Or Trustees ,National Government ,Social Security System ,Investment Governance Frameworks ,Implementing Guidelines ,Processing Tool ,Manila President Rodrigor Duterte Has Signed An Administrative Order Ao That Directs All Non Bank Government Entities To Formulate Investment Governance Frameworks For Foreign Exchange Fx Derivatives Transactions 28 ,Igned By Duterte On May 24 ,As Released On Thursday Quot There Isa Need To Institute Sufficient Monitoring Safeguards And Risk Management Mechanisms In Fx Derivatives Transactions Protect The National Government 39s Fiscal Economic Interests Non Bank Entities ,Uot The Ao Read Under ,He Regulation Of Fx Derivatives Transactions Non Bank Government Entities Supports The Objective To Configure Country 39s Public Sector Debt Profile ,Uch That Government Debt Involves Extended Maturities ,Nd Ensures An Optimum Mix Of Currencies ,O Minimize The Impacts Of Drastic Currency Movements Department Finance Dof Will Oversee Quot All Fx Derivatives Activities Non Bank Government Entities ,Ncluding Government Owned Or Controlled Corporations Gocc Such As ,Ut Not Limited To ,He Government Service Insurance System ,Nd Philippine Health Insurance Corporation ,S Well As Other Government Entities Not Regulated By The Bangko Sentral Ng Pilipinas Quot Ao States That All Covered Must Formulate Their Respective Investment Governance Frameworks ,O Be Approved By The Board Of Directors Or Trustees ,R The Head Of Agency All Investment Governance Frameworks Will Be Submitted To Dof For Approval Secretary Finance May Disapprove Or Defer On Ground Non Compliance With Requirements Under Implementing Guidelines Issued This Order ,Rovided That The Covered Entity Concerned Will Be Given An Adequate Opportunity To Comply ,Nd Or To Address The Concerns Relative Its Submission Covered Entities Must Submit Dof At End Of Every Quartera Report On Fx Derivatives Outstanding ,A Mark To Market Valuation Report ,F Applicable ,Nd Such Other Reports As May Be Required Under The Implementing Guidelines To Formulated Pursuant This Order Evaluate And Analyze Impacts Of Fx Derivatives Transactions On Financial Exposure Government ,Uch Reports Must Be Included In The Gocc 39s Liabilities And Processing Tool Of Dof ,S May Be Appropriate The Secretary Of Finance Must Promulgate Implementing Guidelines ,Which Must Include ,Mong Others ,He Content Of The Investment Governance Frameworks Covered Entities Within 60 Days From Effectivity Order That Have Executed Fx Derivatives Transactions Prior To Issuance This Are Given 45 Implementing Guidelines Submit Dof Their Respective ,S Well As The Required Reports On Fx Derivatives Outstanding Are Contracts Between Two Or More Parties ,Hich Derive Its Value On An Agreed Upon Underlying Financial Asset ,Index ,For Security ,Such As Bonds ,Ommodities ,Urrencies Or Stocks Pna ,

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