> BANKERS ASSOCIATION OF THE PHILIPPINES IMPORTANT March 16, 2018 ‘TO ALL MEMBER BANKS Attention: Treasurer/Head of Treasury and Treasury Operations Subject: idelines for the Settlement ¢ USD/PHP effective April 1, 2018 Burther to our announcement of February 22, 2018 relating to the migration of the USD/PHP Spot Trading Platform, Central Trade Reporting System and Calculation Agent and the appointment of Bloomberg L.P. as trading platform provider, CTRS and calculation agent for the USD/PHP spot market effective April 1, 2018 for a term of three years, we wish to provide you of the enclosed “Guidelines for the Settlement and Publication of the USD/PHP Spot” for a smooth and orderly conduct of the foreign exchange market commencing on April 2, 2018. A. Clearing And Settlements Currently, all Spot USD/PHP FX deals dealt on the PDEx platform are automatically fed to the PDS Gateway for PvP settlement. These transactions are then authorized/approved in the PDS Gateway by the authorized operations staff. After authorization, these transactions will flow through the PvP settlement process wherein the USD is paid through Citibank, as the USD settlement bank, and the PHP is paid through PhilPaSS at the BSP, which is the PHP settlement bank on a payment-versus-payment basis. Starting April 2, 2018, USD/PHP spot transactions will be dealt in the Bloomberg platform. Currently, there is no automated feed from the Bloomberg platform to the PDS Gateway. The automated feed from the Bloomberg platform to the PDS Gateway is still under construction and will not be available by April 2, Consequently, the clearing and settlement procedures will be as follows: 1. Transaction is dealt in the Bloomberg platform by the FX traders 2, Settlement instructions will need to be entered by the relevant settlements staff into PDS Settle (BaneS v6, also formerly known as eCS), the Electronic Clearing/Settlement System of PDS for PvP settlement. Entering transactions into PDS Settle can be done through either the following: a. Manual online input of individual transactions; or b. Manual upload of payment files in the prescribed format via the PDS Connect SFTP Facility (PDS Connect). ay3. Both parties (USD Buyer and USD Seller) will need to enter their transactions into PDS Settle. 4. Aiter entry into PDS Settle, the transactions can now be authorized/approved by the authorized settlements officers for PvP settlement with Citibank, for the USD, and with the BSP (through PhilPass) for the PHP leg. The aforementioned process is already in place and is currently being used for settlement of USD/PHP FX Swap transactions, Given the foregoing, banks should ensure that they have registered users in PDS Connect in order to enter via upload and approve transactions into PDS Settle (BancS v6 /eCS). Registration in PDS Connect can be done through the PDS Group. We will advise you when the automated feed from the Bloomberg platform to the PDS Gateway is completed and when this arrangement will start operation. Until then, please follow the above manual settlement procedure. B. Publication ‘The BAP likewise wishes to inform the market participants that the USD/PHP. ‘spot rates (the spot rate, the AM weighted average rate, the PM weighted average rate, the whole day weighted average) that will be reported by Bloomberg L.P. and published on Bloomberg Screen page in OTCPHP and Bloomberg Screen FIXI effective April 1, 2018, will be calculated using the same methodology as the rates that are currently reported by the Philippine Dealing & Exchange Corp. (www.pds.com.ph) (and also published on Reuters Screen IPHPFIX=PDSP, Bloomberg ‘Screen FIXT and Bloomberg Screen OTC PH) and the change is merely a change in nomenclature and page of publication and not a new fixing. PDS Spot BAP Spot PDS AM Weighted Average BAP AM Weighted Average PDS PM Weighted Average BAP PM Weighted Average PDS Weighted Average BAP Weighted Average For your guidance and appropriate action. Should you have questions and/or clarifications on the enclosed FX Spot Guidelines, kindly email Ms. Pinky S. Padronia at email address pinky.padronia@bap.org.ph. Thank you. Managing Director 7 ce: Ms. Annie Tejano, Bloomberg L.P. w