CBP Memorandum

May 19, 1986 CBP MEMORANDUM TO : All Securities Dealers/Brokers and Transfer Agents The purpose of this Memorandum is to clarify that stocks transactions, whether arbitrage or investment, may be undertaken by securities dealers/brokers without prior Central Bank approval. Registration of the transaction is required only when the purchase/sale of Philippine shares of stock involves a non-resident, whether the transaction is effected in the domestic or foreign market, and only after the transaction is done. However, it will be the responsibility of the securities dealers/brokers to register said transaction with the Central Bank. The purpose of this requirement is to monitor the foreign exchange inflow/outflow arising from subject transactions. Registration Requirements 1. Whenever a Philippine share of stock has been sold to a non-resident, the local securities dealer/broker shall file with the Central Bank, within 3 business days from transaction date, an application for registration and an authority to effect physical transfer outward of the corresponding certificate of stock when the certificate is to be delivered to the non-resident buyer abroad. 1.a. the application shall be in the prescribed form, sample attached, marked Attachment 1, with the undertaking to submit, within thirty (30) days the Bank Credit Advice evidencing the inward remittance of foreign exchange and the official receipt of sale for persons with authorized agent banks; or the Purchase Confirmation, whenever proceeds of sale are used to purchase other Philippine shares of stock abroad. 1.b. the application shall be accompanied by the local securities dealer's/broker's Confirmation of Sale. 1.c. when the application is complete in all respects, the authorized Central Bank official shall check the appropriate box/es and sign the lower portion of the Application (Form Attachment 1) and release the original to the applicant. 1.d. upon compliance with and reporting of the aforecited undertakings, the Central Bank shall issue a Certificate of Registration (Attachment 1, page 2). 2. When a Philippine share of stock is sold by a non-resident to a resident, the local securities dealer/broker shall file with the Central Bank within three (3) business days from transaction date, an application for registration. 2.a. The application shall be in the prescribed form, sample attached, marked Attachment 2, with the Certification of the Transfer Agent to the effect that the corresponding certificates of stock have been physically transferred-inward and entered into the local registry in the name of the resident buyer or to submit said Certification within thirty (30) days; a Certification that the payment of said shares of stock purchased by a resident did not involve any foreign exchange outflow from the Philippines, e.g. it was funded from FCD accounts or from sale of shares of stock abroad. The application shall be accompanied by the local securities dealer's/broker's Confirmation of Purchase. 2.b. when the application is complete in all respects, the authorized Central Bank official shall sign the lower portion of the Application Form and release the original to the applicant. 3. Failure by a local securities dealer/broker to comply with the requirement to register within three (3) days from the transaction date shall disqualify the remittance of cash dividends which requires prior Central Bank clearance. Additionally, failure by a local securities dealer/broker to comply with the undertakings in the Application, within thirty (30) days from date of transaction , shall automatically revoke the Registration. 4. The Central Bank shall notify the Stock Exchange through its Board of Governors of the non-compliance by any dealer/broker with the requirements of this Memorandum for appropriate action. This Memorandum shall take effect immediately. (SGD.) JOSE B. FERNANDEZ, JR. Governor Attachment Page 1 CBP Form No. Date Foreign Exchange Operations and Investments Department Room 203, 5-Storey Building Central Bank of the Philippines Manila A. Application for Registration of Purchase of Philippine Securities from Non-Resident/s and Authority to Transfer Inward Corresponding Stock Certificates Dear Sir: We hereby apply for Registration of the following Philippine securities purchased from non-resident/s and Authority to Transfer (Inward) corresponding Stock Certificates: Name of Company Transaction Date No. of Stock Cert. (Sold) Selling Price per share US$ Total US$ Name of Non-Resident Seller Country of Residence of Seller Name of Buyer Country of Residence of Buyer We undertake to submit within thirty (30) days from transaction date: Attached are: 1. A copy of the purchase confirmation slip and the "IN" receipt of the securities dealer/broker/agent. 2. Certification of the local stock transfer agent that above described securities have been transferred from foreign to local registry. Failure on our part to comply with this undertaking shall automatically revoke the authorization. We likewise certify that no foreign exchange was purchased from the banking system and remitted from the Philippines in payment for the purchased shares. Very truly yours, Name of Authorized Securities Dealer/Broker Signature of Authorized Officer Over Printed Name & Designation Date __________, 19 _____ CBP Authority No. __________________ CENTRAL BANK OF THE PHILIPPINES M a n i l a B. The transaction/s described above are: Registered. Authorized for Transfer Inward of Certificates with automatic cancellation for non-compliance with above-cited undertaking. Authorized CB Official C. TRANSFER AGENT'S/REGISTRAR'S CERTIFICATION We hereby certify that pursuant to the Order to Transfer of ________________ (Name of __________________________ we undertook the following: Securities Dealer/Broker) Company Certificates CANCELLED CERTIFICATES ISSUED CERTIFICATES Name of No. of Cert. No. Name of No. of Cert. No. Non-Resident Shares Resident Buyer Shares Name of Transfer Agent/Registrar By: Signature of Authorized Officer Over Printed Name & Designation Date _______________, 19 Attachment Page CBP Form No. Date Foreign Exchange Operations and Investments Department Room 203, 5-Storey Building Central Bank of the Philippines A. Application for Registration of Sale of Philippine Securities from Non-Resident/s and Authority to Transfer Outward Corresponding Stock Certificates LLphil Dear Sir: We hereby apply for Registration of the following Philippine securities sold to non-resident/s and Authority to Transfer (outward) corresponding Stock Certificates: Name of Company Shares Transaction Date No. of Stock Cert. (Sold) Selling Price per Share US$ Name of Non-Resident Buyer Country of Residence of Buyer Name of Seller Country of Residence of Seller We undertake to submit within thirty 30 days from transaction date: Attached are: 1. Bank Credit Advice as Proof of Inward Foreign Exchange Remittance, and 2. Proof of sale to banks of the foreign exchange for pesos. Failure on our part to comply with this undertaking shall automatically revoke the authorization. Attached is our Confirmation of Sale. Very truly yours, Name of Authorized Security Dealer/Broker Signature of Authorized Officer Over Printed Name & Designation Date __________, 19 _____ CBP Authority No. __________________ CENTRAL BANK OF THE PHILIPPINES M a n i l a B. The transactions described above are: Registered. Authorized for transfer outward of Certificates in favor of non-resident buyer. Registered with automatic cancellation for non-compliance with above-cited undertaking. Authorized CB Official C. TRANSFER AGENT'S/REGISTRAR'S CERTIFICATION We hereby certify that the following stock certificate numbers were cancelled and new stock certificates nos. issued in the name of _________________ (buyer), with address at ________________________. Old Cancelled New Issued Certificate No. Certificate No. No. of Shares Total Local Stock Transfer Agent/Registrar By: Signature of Authorized Officer Over Printed Name & Designation Date _______________, 19 D. CERTIFICATION OF AUTHORIZED SECURITIES DEALER/BROKER We hereby certify receipt of Foreign exchange sold to authorized Incoming securities purchased abroad. agent bank U.S.$ __________. Please see attached "IN" Receipt. Please see attached proofs. Signature of Authorized Securities Dealer/Broker Over Printed Name and Designation Date ____________, 19 ________ CBP Authority No. E. REGISTRATION OF SECURITIES TRANSACTIONS CENTRAL BANK OF THE PHILIPPINES Certification of Registration CBP ST-AR-No. ________________________________ _________________________________ Date Authority No. ________________ Director