MANILA, Philippines — The government is finalizing the implementing guidelines for the streamlined procedures for mergers, consolidations, and acquisitions of banks in the country.
The draft is now in circulation and major stakeholders are allowed to submit written comments on or before March 11.
The Bangko Sentral ng Pilipinas (BSP) signed a memorandum of agreement (MOA) with the state-run Philippine Deposit Insurance Corp. (PDIC), Securities and Exchange Commission (SEC), Cooperative Development Authority (CDA), and the Philippine Competition Commission (PCC) in October last year to streamline the procedures for applications of mergers, consolidations and acquisitions of banks.
This is part of the government’s thrust to promote ease of doing business in the country to attract more foreign investors.
The Anti-Red Tape Authority (ARTA) commended the initiative.
Under the agreement, the regulators agreed on a harmonized list of requirements for merger, consolidation, and acquisition proposals of banks, effectively cutting by half the number of documentary requirements from 58 to 30.
Likewise, the synchronized timelines and the elimination of duplicate functions among the concerned agencies would significantly reduce the total processing time to only 55 from an average of about 160 business days.
Under the proposed guidelines, the BSP has five days to confirm the receipt of applications for mergers, consolidations, and acquisition from the lead proponent bank.
The next step is the assessment wherein all the signatories to the MOA have seven days from receipt to notify the proponent banks about the completeness of the documents submitted.
The proponent banks are then given 15 calendar days to comply with the noted deficiency subject to an inextendible period of five calendar days upon written request.
The PCC determines if the proposed merger, consolidation, acquisition transaction is non-notifiable or whether the proponent banks need to file a notification wherein the 55-day timeline is not applicable.
The PDIC evaluates if the transaction is compliant with the PDIC Charter and other regulatory issuance, while the BSP assess the viability of the business plans, as well as the compliance with banking laws and central bank regulations.
On the other hand, the SEC reviews whether proponent banks are complying with the revised corporation code, as well as applicable rules and regulations, while the CDA reviews the transaction in terms of compliance with the Philippine Cooperative Code of 2008.
“The agencies shall have a total of 55 business days to process the merger, consolidation, acquisition application, which shall be reckoned from the date of receipt by the lead proponent banks of the latest notice of complete submission issued by any of the agencies,” the draft circular read.