New Rules on the Registration of Long Term Commercial Papers

May 17, 1984 NEW RULES ON THE REGISTRATION OF LONG TERM COMMERCIAL PAPERS Pursuant to Section 4(b) of the Revised Securities Act and other existing applicable laws, the Securities and Exchange Commission hereby promulgates the following New Rules and Regulations governing long term commercial papers, in the interest of full disclosure and protection of investors and lenders in accordance with the monetary and credit policies of the Central Bank: SECTION 1. Scope . These Rules shall apply to long term commercial papers issued by corporations. SECTION 2. Definition . For purposes of these Rules the following definitions shall apply: a) Long term commercial papers shall refer to evidence of indebtedness of any corporation to any person or entity with maturity period of more than three hundred sixty-five (365) days. b) Interbank loan transactions shall refer to borrowings between and among banks and non-bank financial intermediaries duly authorized to perform quasi-banking functions. c) Issue shall refer to the creation of commercial paper and its actual or constructive delivery to the payee. d) Appraised value shall refer to the value of the securities at current prices quoted at the stock exchange. e) Current market value shall refer to the value of the securities at current prices as quoted at the stock exchange. f) Recomputed Debt to Equity Ratio shall refer to the proportion of total outstanding liabilities including the amount of long term commercial papers applied for and any unissued authorized commercial papers to net worth. g) Specific person shall refer to a duly named juridical or natural person as an investor for its own or his own account a trustee for one or more trustors, agent or fund manager for a principal under a fund management agreement and does not include numbered accounts. h) Net worth shall refer to the excess of total assets over total liabilities, net of appraisal surplus. i) Subsidiary shall refer to a company more than fifty (50%) percent of the outstanding voting stock of which is directly or indirectly owned, control, or held with power to vote by another company. j) Affiliate shall refer to a concern linked, directly or indirectly to another by means of: 1. Ownership, control and power to vote of 10% but not 50% of the outstanding voting stock. 2. Common major stockholders, i.e. owning 10% but not more than 50% of the outstanding voting stock. 3. Management contract or any arrangement granting power to direct or cause the direction of management and policies. 4. Voting trustee holding 10% but not more than 50% of the outstanding voting stock. 5. Permanent proxy constituting 10% but not more than 50% of the outstanding voting stock. k) Underwriting shall refer to the act or process of distributing and selling of any kind of original issues of long term commercial papers of a corporation other than those of the underwriter itself either on guaranteed or best effort basis. l) Trust accounts shall refer to those accounts with a financial institution and authorized by the Central Bank to engage in trust functions wherein there is trustor-trustee relationship under a trust agreement. SECTION 3. Conditions for Registration . Long term commercial papers shall be registered under any of the following conditions: a. Collateral The amount of long term commercial papers applied for is covered by the following collaterals which are not encumbered, restricted or earmarked for any other purpose and which shall be maintained at their respective values at all times indicated in relation to the face value of the long term commercial paper issue: 1) Securities listed in the Current market stock exchanges value of 200% 2) Registered real estate Appraised value mortgage of 150% 3) Registered chattel mortgage on heavy equipment, machinery and similar assets acceptable of the Commission and registrable with the appropriate government agency Appraised value of 200% b. Financial Ratios A registrant who meets such standard as may be prescribed by the Commission based on the following complementary financial ratios or each of the immediate past three (3) fiscal years: 1) Ratio of (a) the total cash, marketable securities, current receivable to (b) the total of current liabilities; 2) Debt to equity ratio, with debt referring to all kinds of indebtedness including guarantees; 3) Ratio of (a) net income after taxes to (b) net worth; 4) Net profits to sales ratio; and 5) Such other financial indicators as may be required by the Commission. c. Debt to equity The recomputed debt to equity ratio of the applicant based on the financial statements required under Sec. 4.c. hereof, shall not exceed 4:1, provided that the authorized short term commercial papers do not exceed 300% of net worth; and upon compliance with the registration requirements specified in Sec. 4 hereof. The conditions under which the commercial papers of a registrant were registered shall be strictly maintained during the validity of the Certificate of Registration. SECTION 4. Registration Requirements . Any corporation desiring to issue long term commercial papers shall apply for registration with, and submit to, the Commission the following: a. Sworn Registration Statement in the form prescribed by the Commission; b. Board Resolution signed by a majority of its members 1) authorizing the issue of long term commercial papers; 2) indicating the aggregate amount to be applied for; 3) stating purpose or usage of proceeds thereof; 4) providing that the registration statement shall be signed by any of the following: the principal executive officer, the principal officer, the principal financial officer, the comptroller or principal accounting officer or persons performing similar functions; and 5) designating at least two senior officers with a rank of vice-president or higher or their equivalent, to sign the commercial paper instruments to be issued. c. The latest audited, financial statement and should the same be as of a date more than three (3) months prior to the filing of the registration statements, an unaudited financial statement as of the end of the immediately preceding month: Provided, however, That such unaudited financial statement shall be certified under oath by the accountant and the senior financial officer of the applicant by duly authorized for the purpose and substituted with an audited financial statement within one hundred five (105) days after the end of the applicant's fiscal year; d. Schedule A to L based on subsections C above, in the form attached as Annex "A"; e. Income statements for the immediate past three (3) fiscal years audited by an independent certified public accountant: Provided, That if the applicant has been in operation for less than three (3) years, it shall submit income statements for such number of years that it has been in operation; f. An underwriting agreement for the long term commercial paper issues with all expanded commercial bank or an investment house, or any other financial institution which may be qualified subsequently by the Central Bank with minimum condition, among others, that the underwriter and the issuer shall be jointly responsible for complying with all reportorial requirements of the Commission and the Central Bank in connection with the long term commercial paper issue it being understood that the primary responsibility for the submission of the report to these regulatory agencies is upon the underwriter during the effectivity of the underwriting agreement and thereafter the responsibility shall devolve upon the issuer, Provided, however, That if the issuer is unable to provide the information necessary to meet such reportorial requirements, the underwriter shall not later than two (2) working days prior to the date when the report is due, notify the Commission of such liability on the part of the issuer, Provided, further, that if the underwriting agreement is with a group composed of expanded commercial banks and/or investment houses or any financial institution which may be qualified subsequently by the Central Bank, there shall be a syndicate manager acting and responsible for the group; Provided, finally, That the underwriter may be changed subject to prior approval by the Commission. g. A typewritten copy of preliminary prospectus approved by the applicant's Board of Directors which, among others, shall contain the following: 1) A statement printed in red on the left hand margin of the front margin of the front page, to wit: "A registration statement relating to these long term commercial papers has been filed with, but has not yet been approved by, the Securities and Exchange Commission. Information contained herein is subject to completion or amendment. These long term commercial papers may not be sold or may offers to buy be accepted prior to the approval of the registration statement. This preliminary prospectus shall not constitute an offer to buy nor shall there be any sale of these long term commercial papers in the Philippines as such offer, solicitation or sale is prohibited prior to registration under the Revised Securities Act." 2) Aggregate maximum amount applied for, stated on the front page of the prospectus; 3) Description and nature of the applicant's business; 4) Intended use of proceeds; 5) Provisions in the underwriting agreement naming the underwriter and its responsibilities in connection with among others, the reportorial requirements under these Rules; 6) Other obligations of the applicant classified by maturities-maturing within six (6) months; from six (6) months to one (1) year; and one (1) year and past due amounts; 7) List of assets which are encumbered, restricted or earmarked for any other purposes; 8) List of directors, officers and stockholders owning 2% or more of the total outstanding voting stock of the corporation, indicating any advance to said directors, officers and stockholders; 9) List of entities where it owns more than 33-1/3 of the total outstanding voting stock, as well as borrowing from, and advances to, said entities. h. Projected annual cash flow statement presented on a quarterly basis as of the approximate date of issuance for a period co-terminus with the life time of the issue indicating the basic assumptions thereto and supported by schedules on actual maturity patterns of outstanding receivables and liabilities (under six (6) months to one (1) year, over one (1) year and past due accounts and inventory turn over. i. Date on financial indicators as may be prescribed by the Commission for each of the immediate past three (3) fiscal years such as on solvency, liquidity and profitability. The Commission may, whenever it deems necessary, impose other requirements in addition to those enumerated above. SECTION 5. Action on Application for Registration . a. Within sixty (60) days after receipt of the complete application for registration, the Commission shall act upon the application and shall in the appropriate case grant the applicant a Certificate of Registration and Authority to Issue Long Term Commercial Papers valid for one year which may be renewed annually with respect to the unissued balance of the authorized amount upon showing that the registrant has strictly complied with the provisions of these Rules and the terms and conditions of the Certificate of Registration. b. The Commission shall return any application for registration, in case where the requirements of applicable laws and regulations governing the issuance of long term commercial papers have not been complied with, or for reasons which shall be so stated. SECTION 6. Close-End Registration . Registration of long term commercial papers under these Rules shall be a close-end process whereby the portion of the authorized amount already issued shall be deducted from the authorized amount and may no longer be reissued even if reacquired in any manner. LexLib SECTION 7. Long Term Commercial Papers Exempt Per Se . The following specific long term debt investments are exempt per se from the provisions of these Rules: a. Evidence of indebtedness arising from interbank loan transactions; b. Evidence of indebtedness issued by the national and local governments; c. Evidence of indebtedness issued by government instrumentalities the repayment and servicing of which are fully guaranteed by the National Government; d. Evidence of indebtedness issued to the Central Bank under its open market and/or rediscounting operations; e. Evidence of indebtedness issued by the Central Bank of the Philippines, Philippine National Bank, Development Bank of the Philippines, and Land Bank of the Philippines; f. Evidence of indebtedness issued to the following primary institutional lenders, banks, including their trust accounts, trust companies, non-bank financial intermediaries authorized to engage in quasi-banking functions, investment houses including their trust accounts, financing companies, investment companies, non-stock savings and loan associations, building and loan associations, venture capital corporations, special purpose corporation referred to the Central Bank Monetary Board Resolution No. 1051 dated June 9, 1981, insurance companies, government financial institutions, pawnshops, pension and retirement funds approved by the Bureau of Internal Revenue, educational assistance funds established by the national government, and other entities that may, be classified as primary institutional lenders by the Central Bank in consultation with the Securities and Exchange Commission: provided all such evidence of indebtedness shall be held on to maturity and shall neither be negotiated nor assigned to any one other than the Central Bank and the Development Bank of the Philippines with respect to private development bank in connection with their rediscounting privileges, and financial intermediaries with quasi-banking functions." g. Evidence of indebtedness the total outstanding amount of which does not exceed Fifteen Million Pesos (P15,000,000.00) and issued to not more than fifteen (15) primary lenders other than those mentioned in subsection (f) above, which evidence of indebtedness shall be payable to specific persons, and not to bearers, and shall neither be negotiated nor assigned but held on to maturity; Provided, That the aggregate amount of P15,000,000.00 shall include outstanding short term commercial papers; Provided, further, That in reckoning compliance with the number of primary lenders under this Section, holders of such papers exempt under Section 4(f) of the Rules on Registration of Short Term Commercial Papers, as amended, shall be counted; Provided, furthermore, that such issuer shall: 1. File (1) disclosure statement prior to the issuance of any evidence of indebtedness; and (2) a quarterly report of such borrowings in the forms prescribed by the Commission; and 2. Indicate in bold letters on the face of the instrument the words "NON-NEGOTIABLE/NON-ASSIGNABLE" and Provided, finally, That any issuer in accordance with the Rules on Registration of Long Term Commercial Papers and bonds dated October 15, 1976 and with outstanding long term commercial papers falling under this subsection as of the effectivity date hereof, shall likewise file the prescribed disclosure statement and the quarterly report on such borrowings; h. Evidence of indebtedness denominated in foreign currencies; and i. Evidence of indebtedness arising from bona fide sale of goods or property. SECTION 8. Other Long Term Commercial Papers Exempt from Registration . The following long term commercial papers shall be exempt from registration under Secs. 3 and 4 hereof, but shall be subject to the payment of the exemption fee as prescribed under Section 14 and to the reportorial requirements under Section 15 of these Rules: a. Long term commercial papers issued by a financial intermediary authorized by the Central Bank to engage in quasi-banking functions; b. Long term commercial papers fully secured by debt instruments of the National Government and the Central Bank of the Philippines and physically delivered to the trustee in the Trust indenture. SECTION 9. Prohibitions . a. No long term commercial papers shall be issued, or negotiated or assigned unless the requirements of these Rules shall have been complied with: Provided, That no registered long term commercial paper issuer may issue long term commercial paper exempt per se under Section 7(g) hereof; b. There shall be no pretermination of long term commercial papers neither by the issuer or the lender within 730 days from issue date. Pretermination shall include optional redemption, partial installments and amortization payments; however, installments and amortization payment may be allowed if so stipulated in the loan agreement. SECTION 10. Compliance with Central Bank Quasi-Banking Requirements . Nothing in these Rules shall be construed as an exemption from or a waiver of the applicable Central Bank rules and regulations governing the performance of quasi-banking functions. Any violation of said Central Bank rules and regulations shall be considered a violation of these Rules. SECTION 11. Conditions of the Authority to Issue Long Term Commercial Papers . a. During the effectivity of the underwriting agreement, should the issuer fail to pay in full any interest due on, or principal of long term commercial paper upon demand at stated maturity date, the authority to issue long term commercial papers shall be automatically suspended. The underwriter shall, within the next working day, notify the Commission thereof and the Commission shall forthwith issue a formal Cease and Desist Order enjoining both the issuer and the underwriter from issuing or underwriting long term commercial papers. b. Upon the expiration of the underwriting agreement, it shall be the responsibility of the issuer to notify the Commission that it failed to pay in full any interest due on, or principal of, long term commercial paper upon demand at stated maturity date and has accordingly automatically suspended the issuance of its long term commercial papers. Within the next working day, the Commission shall forthwith issue a formal Cease and Desist Order enjoining the issuer from further issuing long term commercial papers. c. Whenever necessary to implement the monetary and credit policies promulgated from time to time by the Monetary Board of the Central Bank, the Commission may suspend the authority to issue long term commercial paper, or reduce the authorized amount thereunder, or schedule the maturities of the registered long term commercial paper to be issued. SECTION 12. Basic Features of Registered Commercial Papers . a. All registered commercial paper instruments shall have a standard format serially pre-numbered, and denominated. The instrument shall state, among others, the debt ceiling of the registrant and a notice that information about the registrant and a notice that information about the registrant submitted in connection with the registration and other reportorial requirements from the issuer is available at the Commission and open to the public inspection and that the issuer is not authorized by the Central Bank to perform quasi-banking functions. b. A specimen of the proposed commercial paper instrument shall be submitted to the Commission for approval of text thereof. c. The instrument approved by the Commission shall be printed by an entity authorized by the Commission and shall be released by the Commission to the issuer. SECTION 13. Minimal Principal Amount . The minimum amount of each registered long term commercial paper instrument shall not be lower than the amounts indicated in the following schedule: a. Up to two years P100,000.00 b. Over two years but less than four years 50,000.00 c. Four years or more 20,000.00 SECTION 14. Fees . Every registrant shall pay the following fees: a. Upon the application for registration, a filing fee of 1/20 of 1% based on total commercial paper proposed to be issued, but not to exceed P75,000.00; LibLex b. For issuers of commercial papers exempt under Section 8 hereof; an annual exemption fee of P10,000.00. SECTION 15. Periodic Reports . a. Issuers of registered long term commercial papers through their underwriters and those exempt under Sec. 8 hereof shall submit the following reports in the form prescribed by the Commission: 1) Monthly reports on long term commercial papers outstanding as at the end of each month, to be submitted within ten (10) working days following the end of the reference month; 2) Quarterly reports on long term commercial paper transactions accompanied by an interim quarterly financial statement to be submitted within thirty (30) calendar days following the end of the reference quarter; 3) Actual quarterly cash flow statement to be submitted within ten (10) working days following the end of the reference quarter. b. These periodic reports shall be signed under oath by the corporate officers authorized pursuant to a board resolution previously filed with the Commission. c. Issuers whose offices are located in the provinces may, through their underwriters, submit their reports to the nearest extension office of the Commission. SECTION 16. Administrative Sanctions . If the Commission finds that there is a violation of any of these Rules and Regulations and implementing circulars or that any issuer, in a registration statement and its supporting papers, as well as in the periodic reports required to be filed with the Commission and the Central Bank, has made any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statement therein not misleading, or refuses to permit any lawful examination into its corporate affairs, the Commission shall in its discretion, impose any or all of the following sanctions: a. Suspension or revocation, after proper notice and hearing, of the Certificate of Registration and Authority to Issue Commercial Paper; b. A fine in accordance with the guidelines that the Commission shall issue from time to time: Provided, however, That such fine shall in no case be less than P200.00 or more than P500.00 for each violation plus not more than P500.00 for each day of continuing violation. Annex "B" hereof shall initially be the guidelines on the scale of fines. c. Other penalties within the power of the Commission under existing laws; and d. The filing of criminal charges against the individuals responsible for the violation. SECTION 17. Cease and Desist Order . a. The Commission may, on its own motion or upon verified complaint by an aggrieved party, issue a Cease and Desist Order ex-parte, if the violation(s) mentioned in Section 16 hereof may cause great or irreparable injury to the investing public or will amount to palpable fraud or violation of the disclosure requirements of the Revised Securities Act and of these Rules and Regulations. b. The issuance of such Cease and Desist Order automatically suspends the Authority to Issue Long Term Commercial Paper. c. Such Cease and Desist Order shall be confidential in nature until after the imposition in nature until after the imposition of the sanctions mentioned in Section 16 hereof shall have become final and executory. d. Immediately upon the issuance of an ex-parte Cease and Desist Order, the Commission shall notify the parties involved and schedule a hearing on whether to lift such order or to impose the administrative sanctions provided for in Section 16 not later than fifteen (15) days after receipt of notice. SECTION 18. Repealing Clause . These Rules and Regulations supersede the Rules and Regulations of Long Term Commercial Paper and Bonds dated October 15, 1976 and all the amendments to said Rules except as provided in Section 19 hereof. All other rules, regulations, order, memoranda-circular of the Commission which are inconsistent herewith are likewise hereby repealed or modified accordingly. SECTION 19. Transitory Provision . a. Any authority or Certificate of Exemption to Issue Long Term Commercial Papers, granted under the Rules on Registration of Long Term Commercial Papers dated October 15, 1976, valid and subsisting as of the date of the effectivity of these Rules shall remain valid with respect only to all outstanding issues until such issues are retired or redeemed. b. The Commission may, at its discretion and subject to such conditions it may impose, authorize issuance of any unissued portion of the issuer's approved long term debt ceiling solely for refinancing of maturing long term commercial paper issue for a period not beyond fifteen (15) months from the effectivity date of these Rules. SECTION 20. Effectivity . These Rules and Regulations shall take effect fifteen (15) days after publication in two newspapers of general circulation in the Philippines. cdlex (SGD.) MANUEL G. ABELLO Chairman Securities and Exchange Commission APPROVED: (SGD.) JOSE R. FERNANDEZ, JR. (SGD.) CESAR E.A. VIRATA Chairman Minister Monetary Board of the Central Bank Ministry of Finance of the Philippines ANNEX A LONG TERM SCHEDULES A TO L ANNEX B LONG-TERM SCALE OF FINES Nature of Violation Fines 1. Failure to notify SEC within the prescribed period of inability of issuer to provide information on reportorial requirements in violation of Sec. 4(f) P1,000.00 2. Failure to provide underwriter information necessary to meet the reportorial requirements in violation of Sec. 4(f). P1,000.00 3. Failure to ensure observance by the issuer of the use of proceeds stated in the issuer's prospectus and Registration Statement in violation of Sec. 4(g). P1,000.00 4. Late or non-submission of audited financial state- ments in violation of Sec. 4(d) a) Late filing of audited financial statements. 1 P500.00 b) Non-submission of audited financial statements 2 P1,000.00 5. Negotiation or assign- ment of commercial .001 of the amount negotiated paper exempt per se in or assigned but in no case less violation of Sec. 7(f) and (g). than P1,000.00 6. Failure to indicate in bold letters on the face of the commercial paper exempt per se the words: NON-NEGOTIABLE, NON-ASSIGNABLE in .001 of the amount issued but violation of Sec. 7(g) in no case less than P1,000.00 7. Issuance of CPS in excess of the limit prescribed .001 of the amount issued but under Sec. 7(g). in no case less than P1,000.00. 8. Late filing or non-submission of Disclosure Statement in violation of Sec. 7(g). 1. Late filing means submitting the audited financial statements within thirty (30) calendar days after its due date. 2. Non-submission means submitting the audited financial statements thirty (30) calendar days after its due date. a) Late filing of Dis- closure Statement 1 P400.00 b) Non-submission of P400.00 basic penalty and Disclosure Statement 2 P100.00 per day until said disclosure statement is filed. 9. Issuance of registrable commercial paper with- out prior registration in .001 of the amount issued but violation of Sec. 9. in no case less than P1,000.00 10. Negotiation/Assignment of commercial papers .001 of the amount negotiated referred to under Sec. but in no case less than 7(f) and (g) P1,000.00 11. Pretermination of long- .001 of the amount of pre- term commercial paper in terminated but in no case less violation of Sec. 9. than P1,000.00 12. Failure to notify the SEC within the prescribed period of the issuer's in- ability to pay in full any commercial paper upon demand at stated maturity date in violation of Sec. 11. P1,000.00 13. Issuance of registered commercial paper with a principal amount less than the minimum pre- scribed under and in violation of Sec. 12. P500.00 per paper 14. Late or non-submission of monthly and quarterly reports in violation of Sec. 15. 1. Late filing means submitting the Disclosure Statement within five (5) working days after the issuance of commercial papers. 2. Non-submission means submitting the Disclosure Statement five (5) working days after the issuance of commercial papers. a) Late filing of monthly/quarterly reports P500.00 b) Non-submission of monthly/quarterly reports P1,000.00 15. Inadequate or inaccurate disclosure or materials in- formation in registration statement and periodic reports. P5,000.00 16. Issuance of commercial .002 of the amount issued in papers in excess of debt- excess of the debt ceiling but ceiling. in no less than P1,000.00 17. Violation of the Cease and Desist Order issued under Sec. 17. P5,000.00 The foregoing schedule of principal fines shall be imposed on first violations and the second and third or subsequent violations shall be fined double and triple the amount of the above-mentioned fines, respectively. For continuing violations, an additional daily fine of not more than P500.00 for each day the violation persists shall be imposed. It shall be understood that the Commission may impose fines on other areas of violations that may be further detected as it implements the Revised Securities Act and its implementing rules and regulations and circulars, provide that such fine shall in no case be less than P200.00 nor more than P50,000.00 for each violation plus not more than P500.00 for each day continuing violation. In addition, the imposition of the foregoing Scale of Fines shall be without prejudice to the application of other administrative sanctions provided for under the Rules and/or the filing of criminal charges against the individuals responsible for the violation. 1. Late filing means submitting the monthly/quarterly reports within thirty (30) calendar days after its due date. 2. Non-submission means submitting the monthly/quarterly reports thirty (30) calendar days after its due date. ANNEX C December 24, 1981 MEMORANDUM CIRCULAR NO. 01 TO : All Financial Intermediaries Authorized by the Central Bank to Engage in Quasi-Banking Functions SUBJECT : Filing of Information Statement and Payment of Exemption Fees. Pursuant to Section 5 and 15 of the New Rules on Registration of Short-Term Commercial Papers implementing P.D. No. 678, as amended by P.D. 1798, every financial intermediary authorized by the Central Bank to engage in quasi-banking functions with authority to issue commercial papers valid and subsisting as of December 11, 1981, the date of effectivity of the said Rules, shall file with the Money Market Operations Department of the Commission an Information Statement annually not later than thirty (30) days after the end of each calendar year in the form prescribed for the purpose and shall pay the Commission an annual exemption fee of P10,000.00. Failure to file the required Information Statement within the period prescribed, shall be subject to the administrative sanctions provided for under Section 18 of the New Rules. For strict compliance. (SGD.) MANUEL G. ABELLO Chairman ANNEX D December 28, 1984 NEW MEMORANDUM CIRCULAR NO 3, AS AMENDED TO : Dealers/Issuers of Commercial Papers SUBJECT : Standardization of Commercial Papers Pursuant to the provisions of the Revised Securities Act and its implementing rules, regulations, and circulars, and in order to standardize commercial papers, the following guidelines shall be observed : cdlex 1. All issuers authorized to issue commercial papers shall before issuance thereof, file with the Commission a written application to print commercial paper forms the contents of this indicate, among others, the following: 1.1 The Issuer's Authority to Issue Commercial Papers, issue and expiry dates thereof; 1.2 Approved debt ceiling; 1.3 Committed credit line, IF ANY; 1.4 Name of Guaranteeing financial institution; 1.5 Expiry date of credit line agreement; 1.6 Maturity value, or terms of the instrument; 1.7 Whether the instrument to be issued is negotiable or non-negotiable, and whether short-term instruments are registered under ordinary or special registration; AND LONG TERM COMMERCIAL PAPERS, UNDER COLLATERAL, FINANCIAL RATIOS OR DEBT TO EQUITY CONDITION; 1.8. Denomination of short-term instrument in terms of maturity value which shall not be less than P300,000 00; 19. A STATEMENT THAT THERE SHALL BE NO PRE-TERMINATION OF LONG-TERM COMMERCIAL PAPERS EITHER BY THE ISSUER OR THE LENDER WITHIN 730 DAYS FROM ISSUE DATE. PRETERMINATION SHALL INCLUDE OPTIONAL REDEMPTION, PARTIAL INSTALLMENTS AND AMORTIZATION PAYMENTS HOWEVER, INSTALLMENT AND AMORTIZATION PAYMENTS MAY BE ALLOWED IF SO STIPULATED IN THE LOAN AGREEMENT . 1.10 A NOTICE THAT INFORMATION ABOUT THE REGISTRANT SUBMITTED IN CONNECTION WITH THE REGISTRATION AND OTHER REPORTORIAL REQUIREMENTS FROM THE ISSUER IS AVAILABLE AT THE COMMISSION AND OPEN TO PUBLIC INSPECTION AND THAT THE ISSUER IS NOT AUTHORIZED BY THE CENTRAL BANK TO PERFORM QUASI-BANKING FUNCTIONS 1.11 MINIMUM PRINCIPAL AMOUNT OF LONG-TERM COMMERCIAL PAPERS SHALL NOT BE LOWER THAN THE AMOUNT INDICATED AS FOLLOWS A) UP TO TWO YEARS P100,000.00 B) OVER TWO YEARS BUT LESS THAN FOUR YEARS 50,000.00 C) FOUR YEARS OR MORE P20,000.00 2. A SPECIMEN OF THE PROPOSED COMMERCIAL PAPER INSTRUMENT SHALL BE SUBMITTED TO THE COMMISSION FOR APPROVAL OF THE TEXT THEREOF. 3. Unissued commercial papers printed in accordance with this Circular shall, from time to time, be released by the Commission on a per need basis to the issuer upon the latter's written request. 4. Printing of additional copies of the commercial papers shall comply with the foregoing requirements. 5. Only commercial papers prescribed and authorized by the Securities and Exchange Commission and due printed by the ENTITY as authorized by the Commission shall be issued . prcd FOR STRICT COMPLIANCE. (SGD.) MANUEL G. ABELLO Chairman ANNEX D July 27, 1983 MEMORANDUM CIRCULAR NO. 4 TO : All Financial Intermediaries/Dealers and Issuers of Commercial Papers SUBJECT : Presentation of Proof of Authority to Issue Commercial Papers to Financial Intermediaries/Dealers by Issuers In order to ensure that valid authority is presented by issuers of commercial paper under the rules implementing the Revised Securities Act and other applicable laws, the following procedures shall observed: 1. All corporate issuers of commercial papers shall present to prospective creditor proof of authority to issue registered commercial papers, by furnishing the creditors with a true of such authority, verified against the original authority by the creditor, or a certified true copy issued by the Commission, before effecting any commercial paper drawdown, availments/roll-over or extension of commercial papers after the expiry of their regular authority. 2. All Financial Intermediaries, Dealers shall, before selling or underwriting any commercial paper issue, or releasing proceeds of any commercial paper availments, drawdown, or granting roll-over or extension, require of commercial paper issuers the presentation of proof of authority to issue registered commercial papers, for a true copy of the same verified by them against the original of such authority or a certified true copy issued by the Commission. 3. All Financial Intermediaries/Dealer or Issuers found violating the provisions hereof shall be liable to the imposition monetary penalty and/or suspension revocation of their authority to issue commercial papers, pursuant to the Revised Securities Act and its implementing rules and regulations, at the discretion of the Commission. TheiStical shall take effect immediately. (SGD.) MANUEL G. ABELLO Chairman ANNEX E December 28, 1984 NEW MEMORANDUM CIRCULAR NO. 5 AS AMENDED TO : All Short Term And Long Term Commercial Paper/Bond Issuers/Dealers SUBJECT : Submission o f Reports In order to effectively facilitate the monitoring of activities in the money market, short-term and long-term commercial paper/bond issuers/dealers whether registered or exempt and required by existing rules and regulations governing commercial papers to submit periodic report shall submit such report in the form and within the periods prescribed hereunder: cdlex Type of Report Type of Issuer A) Monthly Report B) Quarterly Report Form Form (Deadline: Within (Deadline: Within 10 working days 30 calendar days following the end following the end of the reference of the reference month) quarter) M-2-3-01 Q-2-3-01 Banks and non-bank financial intermediaries with QB license M-101 (NQB) Q-101 (4) Banks and non-bank financial intermediaries without QB license M-101-10-40 Q-101 (4) Other registered issuers AND THOSE EXEMPT PER SE UNDER SEC. 8 OF THE NEW RULES ON REGISTRATION OF LONG-TERM COMMERCIAL PAPERS Q-EPS-4-83 Exempt per se under Sec. 4(f) of the New Rules on Registration of Short-Term Commercial Papers and EXEMPT PER SE UNDER SEC. 7(G) OF THE NEW RULES ON REGISTRATION OF LONG-TERM COMMERCIAL PAPERS Actual Quarterly Cash REGISTERED ISSUER Flow Statement AND THOSE EXEMPT UNDER (Deadline: Within ten (10) SEC. 8 OF THE NEW working days following the RULES ON REGISTRATION end of the reference quarter) OF LONG-TERM COMMERCIAL PAPERS Failure to comply with this Circular shall subject the issuer to applicable sanctions prescribed under the Scale of penalties and/or other existing rules as the Commission may deem appropriate. cdll Upon the date of effectivity hereof, this Circular amends Memorandum Circular No. 5, as amended, dated 7 September 1983. For strict compliance. (SGD.) MANUEL G. ABELLO Chairman ANNEX F September 7, 1983 MEMORANDUM CIRCULAR NO. 6 TO : All Dealers/Issuers of Commercial Papers SUBJECT : Copy Furnishing of Monthly/Quarterly Reports to the Central Bank of the Philippines To enable a simultaneous monitoring and compilation of monthly and quarterly reports of commercial paper transaction by the Securities and Exchange Commission and the Central Bank of the Philippines which have joint supervision in the enforcement of the provisions of the Revised Securities Act of 1982 on commercial paper issuances and its implementing rules and regulations, henceforth, all corporate issuers/dealers shall furnish the Department of Financial Intermediaries, * 16th Floor, Central Bank of the Philippines, a copy of the monthly/quarterly reports on short term and long term commercial papers and bonds. For strict compliance. (SGD.) MANUEL G. ABELLO Chairman ANNEX G September 7, 1983 NEW MEMORANDUM CIRCULAR NO. 7 TO : All Commercial Paper Issuers Under Sec. 4(f), New Rules on Registration of Short-Term Commercial Paper dated December 8, 1981, as amended. SUBJECT : Submission of Disclosure Statement All corporations desiring to issue or those with outstanding commercial papers as of September 7, 1983 which are exempt per se under Section 4(f) of the New Rules on Registration of Short-Term Commercial Papers dated December 8, 1981, as amended on August 16, 1983, shall submit the prescribed Disclosure Statement within the following schedules: Type of Issuer Filing Schedule 1. Corporations desiring Prior to issuance to issue commercial papers exempt per se under Section 4(f) 2. Corporations with September 8, 1983 to outstanding com- October 31, 1983 mercial papers falling under Section 4(f) Failure to comply with this Circular shall subject the issuer to such sanctions under the aforementioned New Rules and the Revised Securities Act as the Commission may deem appropriate. cdll For strict compliance. (SGD.)MANUEL G. ABELLO Chairman ANNEX H December 28, 1984 NEW MEMORANDUM CIRCULAR NO. 8 TO : All Financial Intermediaries Authorized by the Central Bank to engage in quasi-banking function (QBF), and other corporate issuers issuing long-term commercial papers fully secured by debt instruments of the National Government and the Central Bank of the Philippines SUBJECT : Filing of Information Statement and Payment of Exemption Fee Pursuant to Sections 8 and 15 of the New Rules on Registration of Long-Term Commercial Papers dated May 17, 1984, subject corporations shall file with the Money Market Operations Department of the Commission an Information Statement initially not later than January 31, 1981 and every year thereafter on the anniversary month in the form prescribed for the purpose and shall pay to the Commission an exemption fee of P10,000.00. Provided that, if no new issuances are made during any of the succeeding years by subject corporations, the exemption fee shall not be imposed. Failure to comply with this Circular shall subject the issuer to such sanctions under the aforementioned New Rules and the Revised Securities Act, as the Commission may deem appropriate. llcd For strict compliance. (SGD.) MANUEL G. ABELLO Chairman ANNEX I December 28, 1984 NEW MEMORANDUM CIRCULAR NO. 9 TO : All Commercial Paper Issuers Under Sec. 7(g) of the New Rules on Registration of Long-Term Commercial Papers, dated May 17, 1984 SUBJECT : Submission of Disclosure Statement All corporations desiring to issue or those with out standing long-term commercial papers as of July 27, 1984, which are exempt per se under Section 7(g) of the New Rules on Registration of Long-Term Commercial Papers, dated May 17, 1984, shall file the prescribed Disclosure Statement within the following schedules: Type of Issuer Filing Schedule 1. Corporations desiring Prior to Issuance to issue long-term commercial papers exempt per se under Sec. 7(g) 2. Corporations with On or before outstanding long-term January 31, 1985 commercial papers falling under Sec. 7(g) Failure to comply with this Circular shall subject the issuer to such sanctions under the aforementioned New Rules and the Revised Securities Act as the Commission may deem appropriate. cdll For strict compliance. (SGD.)MANUEL G. ABELLO Chairman Footnotes * Now Supervision and Examination Sector Department IV.