SEC releases draft rules of FIST law | ABS-CBN

Featured:
|

ADVERTISEMENT

Featured:
|
dpo-dps-seal
Welcome, Kapamilya! We use cookies to improve your browsing experience. Continuing to use this site means you agree to our use of cookies. Tell me more!

SEC releases draft rules of FIST law

SEC releases draft rules of FIST law

ABS-CBN News

 | 

Updated Feb 19, 2021 05:41 PM PHT

Clipboard

A security guard scans the temperature of clients observing social distancing as they line up to enter the bank in Quezon City, March 20, 2020 on Day 6 of the lockdown in Metro Manila. Fernando G. Sepe Jr., ABS-CBN News/File


MANILA (UPDATE) - The Securities and Exchange Commission (SEC) has released to the public on Friday the draft implementing rules and regulations (IRR) of a newly passed law that will help banks and financial institutions manage risk from piling bad loans amid the COVID-19 crisis.

The Financial Institutions Strategic Transfer or FIST Act allows banks and financial institutions to dispose of non-performing assets (NPAs) through selling them to "FIST corporations" or FISTCs.

The draft IRR contains the guidelines on the creation of FIST firms that will invest in or acquire bad loans.

Based on the draft IRR, FISTCs must be formed and registered with the SEC within 36 months of the effectivity of the FIST Act for it to be incentivized.

ADVERTISEMENT

FISTCs can avail tax incentives in owning NPAs, and can be exempt in paying income taxes of the assets.

NPAs can be bad loans, real properties acquired in settlement, or receivables, including shares of stocks and personal properties.

Banks and financial institutions can sell NPAs to FISTCs only when they applied for and was granted certificate of eligibility (COE) by their regulators, which are:

  • Bangko Sentral ng Pilipinas (BSP) for private banks and other credit-granting institutions
  • Department of Finance (DOF) for government-owned and controlled corporations like Landbank
  • Insurance Commission for insurance companies
  • SEC for financing and lending companies, accredited microfinance NGOs, and investment houses, except their trust and quasi-banking functions, or any qualified entity not under the DOF or BSP.

FISTCs can also issue "investment unit instruments" (IUIs) for a minimum of P10 million which they can sell to investors, subject to SEC approvals.

An FISTC is prohibited to the IUIs of another FISTC.

The draft IRR has inputs from the BSP, BIR, and the NEDA, and has been released for public comments.

The FIST Act is seen to support and give liquidity to the banking sector which was burdened by unpaid loans, as millions of Filipinos were rendered jobless during the pandemic.


ADVERTISEMENT

ADVERTISEMENT

It looks like you’re using an ad blocker

Our website is made possible by displaying online advertisements to our visitors. Please consider supporting us by disabling your ad blocker on our website.

Our website is made possible by displaying online advertisements to our visitors. Please consider supporting us by disabling your ad blocker on our website.