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Markfin - Module 1 Activities

The document discusses Markfin Module 1 activities, including an introduction to financial markets and principles for financial market infrastructures in the Philippines. It provides an overview of the individual investor's role in financial markets by providing funds. It then discusses four key principles for financial market infrastructures in the Philippines: governance, credit risk management, managing general business risks, and access and participation requirements. These principles guide financial market infrastructures to operate in a stable, organized manner and promote equal access to information.

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Tricia Dimaano
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195 views

Markfin - Module 1 Activities

The document discusses Markfin Module 1 activities, including an introduction to financial markets and principles for financial market infrastructures in the Philippines. It provides an overview of the individual investor's role in financial markets by providing funds. It then discusses four key principles for financial market infrastructures in the Philippines: governance, credit risk management, managing general business risks, and access and participation requirements. These principles guide financial market infrastructures to operate in a stable, organized manner and promote equal access to information.

Uploaded by

Tricia Dimaano
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Markfin - Module 1 Activities

DISCUSSION 1: Introduction to Financial Markets

 In your own view, how significant is the individual investor to the financial market?
The financial market serves as a place wherein the flow of funds is being facilitated to allow
financing and investing to borrowers. Given such, an individual investor plays a vital role in the
financial market since they are the ones who provide and lend funds in the form of securities
and assets to borrowers who are in need of such. Without them, the financial markets will not be
able to perform its function for the economy.

ASSIGNMENT 1: Financial Infrastructure

 Please research for "Principles for Financial Market Infrastructures of the Philippines".
 Discuss at least 3 principles based on how you understand the principles.

The Principles for Financial Market Infrastructures (PFMI) are a set of standards that are
used and followed internationally by financial market infrastructures (FMIs) for facilitating
payments, clearing and settlement systems. It consists of twenty-four (24) standards which are
categorized into nine (9) such as general organization, credit and liquidity risk management,
settlement, central securities depositories and exchange-of-value settlement systems, default
management, general business and operational risk management, access, efficiency and
transparency. In the Philippines, only relevant principles are being adopted that will be
applicable to the kinds of payment system in the country. Some of these include governance,
credit risk, general business risk and, access and participation requirements.
First, Governance is the second principle which belongs to the category of General
Organization. In this principle, FMIs are required to have an efficient and effective authorities or
agencies that will lay out all of the applicable principles in a clear and organized manner.
Furthermore, they should be able to provide a safe environment for the FMIs to enable the
financial systems to become more stable and developed within the economy of the country.
Second, the fourth principle of the PFMI belonging to the Credit and Liquidity Risk
Management category is the Credit Risk. This deals with the ability of the FMIs to measure,
control and manage their credit facilities arising from their business processes and functions. In
here, FMIs should be able to maintain and gather enough financial resources in order to cover
up their credits especially for those who are more probable to experience riskier scenarios.
Third, General Business Risk is the fifteenth principle which belongs to the category of
General Business and Operational Business Management. It is described here that FMIs should
be able to manage the general business risks that they may encounter such as decreasing
economy, business interruptions and etc. Given such, they should be able to gather and hold
enough liquid net assets to cover possible losses that the businesses may experience. These
needed assets should be sufficient enough to ensure that the operations and services of the
FMIs would still continue.
Lastly, the eighteenth principle which belongs to the Access category is the Access and
Participation Requirements. This enables everyone to become knowledgeable on the FMI
participation criteria and requirements since the needed information can be easily accessed by
the public. Given such, it promotes a fair and equal access of information for anyone who is
interested and willing to participate in such business sector.
The principles mentioned are only four of the principles adopted by financial market
infrastructures in the Philippines. With these, FMIs became more guided and stabilized within
the country and are much able to withstand financial and economic distress.

References:
Bangko Sentral ng Pilipinas. (n.d.). Circular PFMI Adoption. Retrieved from
https://www.bsp.gov.ph/Regulations/Issuances%20of%20Policy%20Exposure
%20Drafts/Draft%20Circular%20PFMI%20Adoption.pdf
Bangko Sentral ng Pilipinas. (n.d.). Payments and Settlements. Retrieved from
https://www.bsp.gov.ph/Pages/PAYMENTS%20AND
%20SETTLEMENTS_deletethis/Overview.aspx
Bank for International Settlements. (2012). Principle for financial market infrastructures.
Retrieved from https://www.bis.org/cpmi/publ/d101a.pdf
Principles for financial market infrastructures. (2012). Retrieved from
https://www.bis.org/cpmi/publ/d101.htm

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