Hon. Narciso D. Monfort

May 9, 1985 Hon. Narciso D. Monfort Batasang Pambansa Quezon City Dear Hon. Monfort: This relates to Parliamentary Bill No. 5508, proposing to amend Sections 4, 5 and 9 of P.D. No. 175, as amended, for the purpose of restoring the tax exemption and other privileges enjoyed by cooperatives under previous cooperative laws. Said Parliamentary Bill was referred to this Commission for comments specifically in view of Section 2 thereof amending Section 5 of P.D. 175, as amended, which reads, as follows: llcd "SECTION 2. Section 5 of the same Decree is amended to read as follows: 'SECTION 5. Privileges of Cooperatives . Cooperatives shall enjoy the following privileges: xxx xxx xxx (E) Exemption of its securities from the provisions of the Securities Act provided such securities are not speculative'." The above proposed provision is merely an affirmation of the provision of Section 5(a) (4) of the Revised Securities Act which provides in part as follows: "SECTION 5. Exempt Securities . Except as expressly provided, the requirement of registration under subsection (a) of Section 4 of this Act shall not apply to any of the following classes of securities: xxx xxx xxx 4. . . . any security issued by rural credit associations or by cooperative marketing associations which are subject to regulation and supervision by the proper government agency. xxx xxx xxx." It should be noted that the speculative or non-speculative nature of securities under the former Securities Act had been repealed by the Revised Securities Act. Hence, the proposed amendment should read thus: "SECTION 5. . . . (h) Exemption of its securities from the requirement of registration under sub-section (a) of section four (4) of the Revised Securities Act." Very truly yours, (SGD.) MANUEL G. ABELLO Chairman