Interested to hear what others make of the article below.
Does it mean PIL have until 7th Feb 2024 to fully comply with the EMI capital requirements?
Considering they only had $3m cash at the end of last quarter and burning around $700k, they would be well under the PHP 100 million (roughly AU$2.8m) already.
Does that mean we can definitely lock in a capital raise between now and end of Jan 2024? If so how much would they raise and at what price?
Perhaps $3m to $5m around the 2 cent mark? Or is that wishful thinking?
https://accralaw.com/2023/04/12/strengthening-regulations-on-e-money/“Given these rapid developments, local regulations are expected to keep abreast with changes in the manner by which the public transact with e-money in light of its present scale. Hence,
on 7 February 2023, the Bangko Sentral ng Pilipinas (“BSP”
, in an effort towards strengthening the regulation of e-money issuers (“EMI”, released BSP Circular No. 1166 series of 2023 (“Circular” amending the pertinent provisions of the Manual of Regulations for Banks (“MORB” and the Manual of Regulations for Non-Bank Financial Institutions. The new BSP issuance on e-money aims to promote public safety and protection in dealing with e-money by updating regulations to be responsive and adaptable to existing circumstances.”
“Existing EMIs authorized to issue e-money or engage in e-money operations must, within three (3) months from effectivity of the Circular, submit to the BSP a certification of compliance with the applicable requirements above
and, if necessary, an undertaking for full compliance therewith within one (1) year from issuance of the Circular.”2. BSFIs and NBFIs with outstanding E-Money balance of less than PHP100 million may:
i. Hold liquid assets following the requirements for BSFIs of the first category; or il. Hold liquid assets equivalent to the total amount of outstanding E-Money balance in any of the following assets:
- bank deposits specifically earmarked for liquidity requirements of the E-Money balances; or
- government securities earmarked and set aside for the purpose; or
- balance in the settlement account with the BSP that is used by a non-bank EMI specifically for the settlement of its net clearing obligations arising from electronic payments, or
- such other liquid assets as the BSP may allow, and
ili. Hold such other liquid assets as the BSP may
dHow.
Capitalization Requirements
The BSP, through the Circular, has also set new capitalization requirements for EMI-Banks and EMI-NBFIs
The new amount shall now be the higher of a the required minimum capitalization for banks depending on bank category or NBFIs depending on NBFI type, or (b) the minimum required capitalization based on EMI category below:
EMI Category
Required
Capital
Large Scale EMI-Bank/EMI-NBFIs
PHP200 million
Small Scale EMI-Bank/EMI- NBFIS
PHP100 million
(20min delay)