BSP orders 20 money changers to report forex deals since January

The Bangko Sentral ng Pilipinas (BSP) has directed 20 money changers to report their foreign exchange transactions since January as monetary officials tightened the monitoring of non-bank dollar transactions.

BSP Deputy Governor Alberto Reyes told reporters yesterday that the BSP has sent out the first batch of letters to at least 20 money-changing corporations and subsequent batches of letters will be sent to more money changers.

According to Reyes, the first batch of letters were sent to money changers which were selected at random.

"We didn’t base the selection on their size or scope of forex transactions; we basically just selected at random based on representations that these corporations are engaged in forex trading," Reyes said.

Reyes said the corporations were not given a deadline for the submission of their reports adding that the BSP was aware that it would take time to collate all the information that they were required to submit.

Reyes admitted that although the BSP did not have any intentions of being directly responsible for regulating money changers, a regulatory framework would be drawn out to make it easier to monitor their activities.

He said the guidelines would most likely cover reporting of their transactions although he said the BSP has not decided what approach to take.

The BSP earlier said it was considering the possibility of requiring big money changers to register and possibly secure a license that would enable them to continue buying and selling foreign currency.

Reyes cited the need to monitor the forex trading activities of big moneychanging corporations whose operations have not been factored in the overall forex transactions.

Money changers are not under the regulatory cover of the BSP but Reyes said their forex transactions fell under an earlier circular that required them to report their daily transactions to the central bank.

"Since they are not banks, they are actually being regulated very loosely," Reyes admitted. "Right now, they are not required to register outside of their corporate registration with the Securities and Exchange Commission."

Reyes also said that eventually, the Anti- Money Laundering Council determine how it would deal with money changers since their operations have been identified as one of the concerns of the Paris-based Financial Action Task Force on Money Laundering (FATF).