BSP Circular 1210: Revised Framework for External Auditors of BSFIs

BSP Circular No. 1210 (Series of 2025) updates the framework for selecting external auditors of BSP-supervised financial institutions (BSFIs). It revises eligibility and categorization rules, reinforces audit engagement requirements, and updates exclusion procedures and transitory provisions.

Key Changes

Revised auditor selection framework for BSFIs, tied to BSP’s list of selected external auditors.
Three auditor categories (A/B/C) aligned to BSFI types and complexity.
Eligibility and documentary requirements updated in Appendix 159/Q‑103/S‑22/P‑21/N‑29/T‑91/CC‑8.
Audit engagement requirements clarified for audit scope and BSP information sharing.
BSP supervisory actions expanded, including auditor downgrades and exclusions.
Exclusion guidelines updated in Appendix 39/Q‑30/S‑7/P‑13/N‑15/CC‑4.
Transitory rules set for 2024/2025 audit cycles and re‑inclusion timelines.

Who Is Affected

Banks, quasi-banks, trust entities, NSSLAs, and other BSFIs.
External audit firms, partners, and sole practitioners seeking BSP accreditation.
Audit committees, boards, and compliance teams responsible for auditor selection.

Effective Date & Transition

The circular takes effect 15 calendar days after publication in the Official Gazette or a newspaper of general circulation.

Transitory provisions

Auditors whose inclusion expired after the audit of 2025 FS may still audit 2024 FS if in good standing.
Applications for inclusion covering 2024 FS and beyond must be filed with BSP Financial Supervision Sector.
Suspended/delisted auditors may reapply after the lapse of suspension or five years (for delisting).

Compliance Actions Checklist

Verify auditor eligibility against BSP’s List of Selected External Auditors.
Match auditor category to the BSFI’s classification (A/B/C).
Update audit engagement contracts with BSP disclosure provisions.
Review partner rotation and long‑association requirements under the Code of Ethics.
Prepare documentation for applications under Appendix 159/Q‑103/S‑22/P‑21/N‑29/T‑91/CC‑8.

Categories Summary

Group A

UBs/KBs, foreign bank branches/subsidiaries, trust departments/corporations, digital banks.

Group B

TBs, NBFIs with quasi‑banking license, VASPs, credit card issuers/acquirers.

Group C

RBs/Coop Banks, NSSLAs, pawnshops, RTCs/MCS/FXDs.

FAQs

Can BSP require a higher‑category auditor? Yes. BSP may require a BSFI to appoint an auditor from a higher category as a supervisory action.

How long is inclusion on the BSP list valid? Validity is five years or one year, as determined by BSP.

What triggers exclusion? Non‑compliance with Section 164 requirements, refusal to submit documents, and other grounds in Appendix 39/Q‑30/S‑7/P‑13/N‑15/CC‑4.