Guidelines on Foreign Currency Matching and Information Requirements on Interest Rates
- Published: April 9, 2011
- Gazette: 32,489
- Category: Commercial
- Type: Other
Summary
This resolution requires Honduran banks and financial institutions to maintain balanced foreign currency holdings (mainly dollars), allowing a maximum of 5% short position or 50% long position of their capital. It also mandates monthly reporting of interest rates and foreign currency positions to the National Banking and Insurance Commission.
Articles
These present guidelines have the purpose of defining the matching of active and passive operations carried out by institutions of the financial system in foreign currency, information on interest rates, and the controls that must be established and maintained, as well as the frequency of information on what is prescribed that they must send to the National Commission of Banks and Insurance.
For the purposes of these guidelines, the following definitions shall be used: Foreign Currency Assets: The holding of assets in foreign currency whose balances are recorded in subgroups 1012, 1022, 1032 and 1042, 1052, 1062, 1082, 1092 and 4012 of the "Accounting Manual for Financial Institutions". Interest Rate Setting: Policy adopted by institutions of the financial system on interest rates in their active and passive operations in foreign currency, considering the credit risk of borrowers, competition in the deposits market, the profitability of the institution and legal regulations on the collection and payment of interest. Own Resources: Amount of resources, as defined in the "Standards for Capital Adequacy of Banks, Savings and Loan Associations and Financial Societies" issued by the Commission. Commission: National Commission of Banks and Insurance. Financial System Institution: Public or private banks, financial societies, savings and loan associations and other institutions that have authorization from the Commission. Foreign Currency Liabilities: Liabilities contracted by the entity in foreign currency, whose balances are recorded in subgroups 2012, 2022, 2032, 2042, 2052, 2062 and 4022 of the "Accounting Manual for Financial Institutions". Foreign Currency Position: Difference between assets and liabilities in foreign currency, calculated independently for each type of currency. Balanced Position: Equality between assets and liabilities in foreign currency. Short Position (Over-Sold): Excess of foreign currency liabilities over foreign currency assets, recorded in the accounting subgroups described above. Long Position (Over-Bought): Excess of foreign currency assets over foreign currency liabilities, recorded in the accounting subgroups described above. Superintendency: Superintendency of Banks, Financial Entities and Savings and Loan Associations.
In order to maintain adequate control and monitoring of exchange rate risk, in accordance with the limits established in Article 5 of these guidelines, the Board of Directors or senior Management of financial system institutions must approve, in accordance with their powers, the policies, practices and procedures related to foreign currency matching, as well as the respective internal controls and information systems and support for the reports on this matter that must be sent to the Commission. These policies include assigning the management and control of exchange rate risk to officials who have the appropriate hierarchical level, professionalism and experience. Likewise, they must place foreign currency resources in companies that effectively generate funds in that currency, in accordance with current provisions on the matter, especially with what is established in the "Regulation for the Management of Deposit Accounts in Foreign Currency", issued by the Central Bank of Honduras (BCH).
Financial system institutions must inform the Commission of compliance with foreign currency matching limits, and provide basic information regarding interest rates, in accordance with the institutions contained in these guidelines. The Commission, when it deems appropriate, will request information on internal controls and the respective information systems approved by the Board of Directors or Board of Directors, referred to in the previous Article. CHAPTER II FOREIGN CURRENCY MATCHING
Financial system institutions must maintain a preferably balanced foreign currency position and, in any case, if a short position or a long position is recorded, these must be within the following limits: 1. Short Position: Up to 5% (five percent) of own resources measured in lempiras by the equivalent of United States dollars. 2. Long Position: Up to 50% (fifty percent) of own resources measured in lempiras by the equivalent of United States dollars. For these purposes, all operations in other foreign currencies other than United States dollars shall be converted in a first instance to United States dollars and then to Lempiras, according to the quotations periodically reported by the Central Bank of Honduras (BCH).
Financial system institutions shall submit to the Commission, within the first ten (10) business days of each month, an ASCII file with the information corresponding to their foreign currency position in accordance with Annex No. 1 "Foreign Currency Position Report". CHAPTER III INFORMATION ON INTEREST RATES
In order to measure market trends, financial system institutions must submit to the Commission, within the first ten (10) business days of each month, a monthly report in ASCII file with information corresponding to the amounts and weighted average interest rates of their fund collection and placement operations agreed at the close of the month, in accordance with the data contained in Annex No. 2.
Financial system institutions must inform the public of the effective interest rates, commissions and other charges for services, of amounts of the following products, on a board located in a visible place in all branches of the entity and through pamphlets available to the public: CHAPTER IV SANCTIONS
Non-compliance with these guidelines shall be sanctioned in accordance with what is established in the Financial System Law and the current Sanctions Regulation. CHAPTER V FINAL PROVISIONS
The information that serves as the basis for calculating foreign currency matching, as well as that referring to interest rates, shall be kept in a file for up to one (1) year, at the disposal of the Commission. The monthly report on information regarding short and long positions in foreign currency and average interest rates must continue to be submitted to the Statistics Division, dependent on the Studies Management of the Commission, together with the monthly information of the financial statements.
That which is not provided for in these guidelines shall be resolved by the Commission.
These guidelines shall enter into force as of April 1, 2011, and shall be published in the official newspaper "LA GAZETA". 2. Communicate this Resolution to the Institutions of the Financial System, for the corresponding purposes. 3. This Resolution is of immediate execution. F) VILMA C. MORALES M., President. FRANCISCO ERNESTO REYES, Secretary". FRANCISCO ERNESTO REYES Secretary 9 A. 2011. THEREFORE: Based on articles 4 and 114, numeral 1) of the Law of Insurance and Reinsurance Institutions; 6 and 13, numeral 8 of the Law of the National Commission of Banks and Insurance; in session of March 24, 2011; RESOLVES: 1. To reform numeral 1 of Resolution No.1281/25-08-2009 containing the reform to Article 11 of the MINIMUM REGULATIONS FOR THE OPERATION OF INTERNAL AUDIT UNITS OF INSURANCE INSTITUTIONS, which shall be read as follows:
RESPONSIBILITIES OF THE INTERNAL AUDITOR: The Internal Auditor is responsible for complying with the obligations assigned to him in these regulations, as well as reporting in the first instance to the Audit Committee, Board of Directors or directly to the Commission, regarding any modification that occurs in the composition of the Internal Audit Unit that significantly affects its operation and independence, as well as of the significant and relevant facts that have been determined once the corresponding investigations have been concluded. In the case of Branches of Foreign Institutions, the report shall be made to the Audit Committee or directly to the Commission. The Internal Auditor must participate in the sessions of the Board of Directors, in which he shall attend with voice but without vote." 2. To ratify the remainder of Resolution 1036/14-07-2009. 3. Communicate what was resolved to the Insurance Institutions and the Honduran Insurance Chamber for the corresponding legal purposes. 4. This Resolution is of immediate execution. 5. Instruct the Secretariat to proceed to publish this Resolution in the Official Newspaper La Gazeta. (F) VILMA C. MORALES M., President. FRANCISCO ERNESTO REYES, Secretary". FRANCISCO ERNESTO REYES Secretary 9 A. 2011. NOTICE OF SUPPLEMENTARY TITLE The undersigned, Secretary of the Departmental Court of Letters of Ocotepeque, to the general public and for the purposes of the law, DECLARES: That Mrs. MARÍA MAGDALENA CARTAGENA MANCIA, of legal age, married, homemaker, Honduran and domiciled in the municipality of Mercedes, department of Ocotepeque, has requested supplementary title to the following real property: A parcel of land located in El Cerrón, jurisdiction of the municipality of Mercedes, Ocotepeque, department of Ocotepeque, consisting of eight acres in surface area, with the following boundaries: TO THE NORTH, borders with property of ANTONIO CASTILLO and the La Mora ravine, in between; TO THE SOUTH, borders with EMELINA VENTURA and street in between; TO THE EAST, borders with property of JORGE GARCÍA; TO THE WEST, borders with property of PEDRO VENTURA ESCALLON. In possession, quiet, peaceful and without any interruption for more than ten years. Legal Representative, Attorney EVA LIZZETH HERNÁNDEZ MANCIA. Ocotepeque, November 11, 2010 CARLOS ENRIQUE ALDANA SECRETARY DEPARTMENTAL COURT OF LETTERS OF OCOTEPEQUE 10 F., 10 M. and 9 A. 2011 BOOKS PAMPHLETS TRIFOLDS CONTINUOUS FORMS POSTERS INVOICES BUSINESS CARDS DOCUMENT COVERS CALENDARS BOOK BINDINGS MAGAZINES.
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