United Coconut Planters Bank

February 4, 1992 SEC-BED * OPINION FOREIGN CURRENCY DENOMINATED DRAFTS United Coconut Planters Bank S i r : This refers to your letter dated 29 January 1992 requesting the opinion of the Commission on whether or not foreign currency denominated drafts evidencing advances granted by an offshore banking unit to a subsidiary of a foreign corporation duly registered in the Philippines and your subsequent conveyance without recourse are subject to registration under applicable laws. In reply, please be advised that based on the series of transactions outlined in your letter, the transaction between the subsidiary of a foreign corporation and the offshore banking unit is exempt per se under the Rules on Commercial Papers both long term and short term. (Sec 7-f & Sec 4-e, respectively) However, the series of transactions thereafter, i.e. from the OBU to UCPB, and from UCPB et seq., are registrable as required under C.B. Circular No. 1234. Please be advised further that while evidence of indebtedness denominated in foreign currencies is exempt per se from the registration requirements under the Rules on Commercial Papers, both long term and short term, if the same were to be sold or offered for sale in the Philippines, the registration requirements under the Revised Securities Act must be complied with. This is in line with our previous ruling in the Meralco mortgage bonds denominated in foreign currency, issued in the Philippines but sold abroad. Enclosed herewith is our letter dated September 11, 1991, for your ready reference. (SGD.) FE ELOISA C. GLORIA Associate Commissioner