a. Cross-selling means the presentation and/or sale of a financial product, other than bank’s own financial product, to a bank client inside bank premises through written or verbal communications.
b. Financial conglomerate refers to a group of interrelated entities providing significant services in at least two (2) different financial sectors (banking, securities and insurance). A banking group is subsumed within the context of a financial conglomerate. A financial product provider must have been disclosed and reported as part of the group structure pursuant to Item “d(8)” of Sec. 132 (Specific duties and responsibilities of the board of directors).
c. Financial product of an allied undertaking under Section 20 of the General Banking Law refers to financial products created by a financial product provider belonging to the same financial conglomerate.
d. Financial product provider means a financial entity which creates the financial product. The financial product provider should be regulated or supervised by either the Bangko Sentral, the Securities and Exchange Commission (SEC) or the Insurance Commission (IC).
e. Bank premises refer to the physical area occupied by the bank’s head office, branches and other offices.
f. Investment risk refers to the potential loss of the principal amount (either full or partial) invested by the investor.
a. Retail lending or loan products such as credit cards, home mortgage loans, personal loans, auto loans and other related retail loan products;
b. Other retail financial products such as cash cards, debit cards and other related products; and
c. Other similar financial products as may be authorized by the Monetary Board.
a. Mutual funds registered with the SEC;
b. UITFs as authorized by the Bangko Sentral;
c. Variable unit-linked life insurance policy (VULs) as governed by the Insurance Code or under the relevant rules and regulations as may be issued by the IC.
a. Unless specifically trained and qualified for the purpose, the role of bank employees in cross-selling CIS shall be limited to the referral of bank clients to the representatives of financial product providers. Clients should give prior consent before any such referral.
b. There shall be clear distinction between representatives of financial product providers who sell CIS and bank employees. Bank employees authorized to market and/ or sell CIS shall be clearly identified.
c. The presentation and/or sale of CIS shall be conducted in an area distinct from areas where own bank products are sold.
a. Approval of the board of directors of both the bank and the financial product provider to use the former’s bank premises for the presentation and sale of the latter’s financial products;
b. Audited financial statements of the financial product provider for the last three (3) years;
c. Detailed description of the financial product and proof of regulatory approval, if any;
d. Registration and/or accreditation of the financial product provider from the respective regulator;
e. Contract between the bank and the financial product provider;
f. Sample of contracts between the financial product provider and its clients;
g. Promotional materials; and
h. Training profile and necessary license, if required, of representatives who will be handling the cross-selling activity.
|Size of Promotional Material||Print Size|
|15” x 20”||24|
|19” x 25”||36|
a. Product Highlight Sheet (PHS). Potential clients must be provided with a PHS. This succinct document summarizes the key information of the financial product which will be material to the proper understanding by the client of the product, its features and risks. The PHS should at least be a separate document but may form part of the prospectus or contract.
(1) What are you investing in and who are you investing with?
(2) What are the key risks of this investment?
(3) What are the fees and charges for this investment?
(4) How often are valuation available?
(5) How can you exit from this investment and what are the risks and costs in doing so?
(6) How do you contact us?
(7) What other important information should you know before you invest?
b. Client Suitability Assessment (CSA). A CSA of each client shall be undertaken prior to the acquisition of an investment product by the client. The CSA should determine the client’s understanding of, tolerance for and capacity in managing various risks.
c. Investment Policy Statement (IPS). As a complement to a CSA, an IPS must have been generated for a bank client. The IPS formalizes the investment philosophy of the client as well as any investment directive of the client with respect to the handling of his investible funds.
d. Disclosure of conflict of interest. Financial product providers should disclose any material information which can give rise to an actual or potential conflict of interest to the client. Financial product providers should take all reasonable steps to ensure fair dealings with client.
e. Standard disclosure statement. All promotional materials, product highlights sheet and contracts of collective investment schemes should contain a standard disclosure statement which reads as:
a. Notarized Secretary’s Certificate on the approval of the board of directors of the cross-selling of financial products;
b. Notarized Certification, signed by the bank’s president or the country officer in the case of foreign bank branches and compliance officer, of the bank’s compliance with pertinent banking laws, rules and regulations on cross-selling.
a. Monetary penalty – Any amount as may be authorized by the Monetary Board not to exceed P30,000 a day for each violation from the time the violation was committed until it is corrected; and
b. Non-monetary sanction – Any sanctions that the Monetary Board may deem appropriate and allowed by law considering the gravity of the offense.