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Advisory About "Cooling-Off"

01.15.2016

The BSP advises the public about its right to “cooling-off”.  “Cooling-off” is the right of the client of a BSP-supervised financial institution (BSFI) to cancel his investment contract without penalty.   A BSFI should give its 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 their long-term investment decisions.

Below are further details about the right to cooling-off:

  • Who can avail of the right to cooling-off?
    Cooling-off is applicable only to individuals and not corporations, partnerships and associations.
     
  • What financial transactions are covered by the right to cooling-off?
    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).
     
  • How can a BSFI client avail of the right to cooling-off?
    The client should notify the BSFI in writing about his intention to terminate the agreement within the cooling-off period.
     
  • What is the cost to the BSFI client in exercising the right to cooling-off?
    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.


For further clarifications, you may contact:

FINANCIAL CONSUMER PROTECTION DEPARTMENT
Supervision and Examination Sector
BANGKO SENTRAL NG PILIPINAS
5th Floor, Multi-Storey Building, BSP Complex
A. Mabini St., Malate, Manila 1004
E-mail address: consumeraffairs@bsp.gov.ph
Tel. No.: (+632)708-7087

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