Public Distribution of IPO Shares

April 25, 1996 SEC-BED * MEMORANDUM CIRCULAR NO. 03-96 TO : All Stockbroker/Dealers SUBJECT : Public Distribution of IPO Shares In order to clarify the requirement that shares allocated to members of the Philippine Stock Exchange (PSE) in initial public offerings, must be widely distributed to the investing public and pursuant to the PSE Listing Rules, the following are hereby mandated: 1. Henceforth, PSE members are hereby directed to distribute as widely as possible to the public the shares allocated to them by PSE in every initial public offering (IPO). 2. Consequently, PSE members are hereby strictly prohibited from taking any portion of their IPO allocated shares under their dealer's account. 3. Any stockbroker/dealer who desires to take up shares in initial public offerings under their dealer's account, shall subscribe for these shares from the underwriters or purchase them in the secondary market. 4. Within five (5) days from the PSE formal listing of initial public offerings, all stockbroker/dealers are hereby required to submit to the Commission a listing of each subscriber and beneficial owner of their allocated shares, under oath, indicating their name, application number, address, number of shares subscribed, amount paid and official receipt number. Also, it shall submit under oath the number of shares acquired under its dealer's account, if any, and from where acquired. 5. Any stockbroker/dealer violating this Memorandum Circular shall be imposed the penalty of fine in an amount deemed appropriate by the Commission or suspension or revocation of its license depending on the gravity of the violation, in accordance with existing rules. 6. This Memorandum Circular shall take effect immediately. (SGD.) PERFECTO R. YASAY, JR. Acting Chairman