Filing of Reports in Connection with Issuance of Stock Certificates: Deadlines for Delivery of Documents/Penalties

July 14, 1987 SEC-BED * MEMORANDUM CIRCULAR NO. 09-87 TO : Transfer Agents SUBJECT : Filing of Reports in connection with issuance of stock certificates Deadlines for Delivery of Documents/Penalties In order to enable the Securities and Exchange Commission to closely supervise and properly monitor the operations and activities of Transfer Agents in connection with the issuance of Certificates of Securities for the purpose of protecting the interest of the issuer company therein as well as the interest of the public in general, all Transfer Agents, duly registered with the Commission are hereby required to submit the following reportorial requirements: 1. Audit Report Transfer Agents as well as a Transfer Agent who is also the auditor shall within 30 days after the end of each quarter submit to SEC a certified statement in duplicate on result of audit as well as capital structure of each company for whom said Transfer Agent performs his work as such and as auditor; 2. Report on status of pending certificates (annually) a) date received b) reason for delay of delivery; 3. Monthly report on registered transfer of securities including street certificates; and 4. Annual Financial Statements, consisting of a balance sheet and income statement. To expedite the release of Certificates of Securities to the buyers, the Commission reiterates the following rules in delivery of stock certificates: 1. Deadlines for Delivery of Documents all requirements must be complied with and the certificates of stock, as well as necessary documents required for the transfer of shares shall be delivered within the following periods: a) From broker to clearing house not-longer than four (4) days from the date of the transaction. b) From clearing house to transfer agent not longer than four (4) days from receipt of the documents. prcd c) From broker direct to transfer agent not longer than four (4) days from the date of transaction. d) From transfer agent back to clearing house and/or broker not longer than ten (10) days from receipt of documents provided there is a "good delivery", where there is no "good delivery", the certificate and the accompanying documents shall be returned to the clearing house or broker not later than two (2) days after receipt thereof, except when defects can be readily remedied, in which case the clearing house or the broker shall instead be notified of the requirements within the same period. The notice to the clearing house or broker shall indicate that the Securities and Exchange Commission has been notified of such defective delivery. On the tenth (10th) day, the transfer agent shall notify the clearing house and the broker in writing of completed transfer that are still with him pending pick up. A copy of such notification shall be furnished the Securities and Exchange Commission. e) From clearing house to purchasing broker not later than two (2) days from receipt of the certificate of stock, except pull-out certificate which shall be returned to the transfer agent within the same period. f) From purchasing broker to customer not later than two (2) days from receipt of the certificate. If the actual delivery of the certificate can not be made, notice shall be given to the customers by mail or otherwise within the same period. The party who delivers the documents shall see to it that the receiving party stamps thereon the true date and time of his receipt hereof. All deliveries above-mentioned which are made after 12:00 noon shall be considered as received the following day. The number of days listed above shall refer to "working days" and will not include Sundays and holidays. 2. Penalties any violation of the periods of deliveries mentioned under no. 1 shall be penalized by a fine of one hundred (P100.00) pesos per day for every day of delay, as well as/or suspension of license or certificate of authority after proper notice and hearing. Any other violation of these rules shall be punished by fine in such sum as the Commission may impose under Republic Act No. 1143. prcd For your strict compliance. (SGD.) MONICO V. JACOB Associate Commissioner