Standard Chartered gets derivatives license

The Bangko Sentral ng Pilipinas (BSP) has approved recently Standard Chartered Bank’s (StanChart) application to engage in various derivatives, products and variants as a type 1 expanded dealer, the first in the country, under BSP Circular 594. 

StanChart considers the granting of a Type 1 derivative license as an acknowledgment of the institution’s comprehensive and integrated risk management system as well as its best practices in the sale and marketing of various derivatives.

StanChart globally implements very strict appropriateness guidelines and procedures that categorize clients according to objective parameters including their goals, financial capabilities, level of sophistication and risk management capacity. 

With a type 1 license, StanChart may transact in a full range of derivatives as a dealer, broker or end-user. 

A derivative is broadly defined as a financial instrument that primarily derives its value from the performance of an underlying variable. 

BSP Circular 594 introduced new and tighter regulations to govern the derivatives activities of a bank. 

The BSP supports the development of the Philippine financial market by providing banks and their clients with expanded opportunities for financial risk management and investment diversification through the prudent use of such derivatives.