Memorandum: For the Auditor

September 13, 1982 MEMORANDUM FOR : The Auditor FROM : The Director, Corporate and Legal Department SUBJECT : Mechanics on the payment of interests on CBCIs purchased to comply with Section 126 of the Corporation C od e Section 126 of the Corporation Code requires that within 60 days after the issuance to a foreign corporation of the license to transact business in the Philippines, the licensee shall deposit with the SEC for the benefit of present and future creditors of the licensee, securities to the SEC in the actual market value of at least P100,000.00. Since the promulgation of the "Guidelines For the Investment Requirement of Foreign Corporations under Section 126 of the Corporation Code of the Philippines," several foreign corporations have complied with the investment requirement by depositing acceptable securities enumerated under the "Guidelines," one of which are "Central Bank Certificates of Indebtedness (CBCIs)." These deposited securities are presently under the custody of the Cashier's Office for safe-keeping. cdlex However, the question as to the mechanics on the payment of interests on CBCIs purchased to comply with the investment deposit, cropped up. Thus, on June 8, 1982, the matter was referred to the Central Bank for comments and recommendations. In reply thereto, it recommended the following procedures: 1. Since the securities are under the custody of the SEC, the same arrangement with the OIC may be adopted, i.e.,the coupons are to de detached at the SEC in the presence of representatives from the SEC Auditor and Securities Servicing Department (SSD) of the Central Bank. 2. The SEC shall furnish the SSD with a list of the maturing CBCI interests coupons to be detached one week in advance, with advice the time and place for the purpose. 3. The registered owner of his authorized representatives with proper identification, shall pick up his check at the Securities Servicing Department (SSD),Central Bank, one day after every due date. The foregoing procedures was duly noted and approved by the Commission in its meeting on August 27, 1982. LexLib Following the procedure above-mentioned, we are referring to you the attached request of Kowa Company, LTD. dated September 13, 1982, for appropriate action. (SGD.) CORAZON I. MORANDO Director Corporate and Legal Department