The Bangko Sentral ng Pilipinas (BSP) issued an Advisory to public on their right to “cooling-off” as part of the fair treatment standards of the BSP Financial Consumer Protection (FCP) Regulations.
“Cooling-off” is the right of the BSP-supervised financial institution (BSFI) client to cancel his contract without penalty. BSFIs should give their clients at least two (2) banking days from the signing of the contract to cancel.
This right to cooling-off is one of the key requirements of the new BSP Financial Consumer Protection Regulation that seeks to empower clients by giving them the opportunity to reconsider long-term investment decisions.
Cooling-off is applicable only to individuals and not corporations, partnerships and associations. This shall cover investment in long-term financial instruments with a remaining term of at least one year. Examples are government securities, corporate bonds and Long Term Negotiable Certificate of Deposit (LTNCD).
To avail, the client should notify the BSFI in writing about his intention to terminate the agreement within the cooling-off period. The client shall shoulder only reasonable amount of processing or administrative fees plus any mark to market costs from the signing of the contract up to its cancellation. BSFIs should disclose these costs, including the benchmark from which market value of the financial instrument will be determined, prior to the signing of the agreement or in the agreement.