The Financial Sector Forum (FSF) composed of the Bangko Sentral ng Pilipinas (BSP), the Securities and Exchange Commission (SEC), the Insurance Commission (IC) and the Philippine Deposit Insurance Corporation (PDIC) recently agreed to strengthen the supervision of financial conglomerates in the Philippines.
Cognizant of the increasing interconnectedness of transactions of entities within a conglomerate to the financial industry, the FSF decided to improve the existing information sharing arrangements to facilitate the conduct of coordinated regulation and supervision. The member agencies, likewise, agreed to develop common governance standards and to adopt measures to ensure their consistent implementation.
To identify financial conglomerates in the domestic setting, the FSF adopted the concept of “conglomerate-of-interest”. This is anchored in the Joint Forum’s definition of financial conglomerate as any group of companies whose exclusive or predominant activities consist of providing significant services in at least two different financial sectors, i.e., banking, securities, insurance.
The Joint Forum was created in 1996 under the auspices of the Basel Committee on Banking Supervision (BCBS), the International Organization of Securities Commissions (IOSCO) and the International Association of Insurance Supervisors (IAIS) to handle regulatory issues common to the banking, securities and insurance sectors, including financial conglomerates.