MORNBFI Vol. 1 - Planters Development Bank

APP. Q-108.12.31GUIDELINES TO EVALUATE INVESTMENT HOUSES(Appendix to Sec. 4105Q)a. Capital - The requirement is aminimum paid-in capital of P200.0 millionfor an investment house to be establishedin Metro Manila and P100.0 million for allothers. Foreign equity, if any, shall beregistered with and approved by the Boardof Investments and the BSP.b. Citizenship - Majority (51%) of thevoting stock shall be owned by Filipinos.c. Directorship/Officership - Majorityof the board members shall be Filipinos.Resident foreign directors and techniciansshall register with the Bureau ofImmigration and Deportation. Compliancewith the prohibition on interlockingdirectorship/officership between banks andinvestment houses and between QBs shallbe observed.d. Promotion of Public Interest andEconomic Growth -(1) Submission of a one (1)-yearinvestment program indicating:(a) Underwriting and distributionactivities. These shall show in details thevarious stages leading to the completionof an agreement. Target dates for each stagein the underwriting process shall beindicated which should serve as referencepoints in the event that an investment houseis unable to bring the program and itscomponents to fruition. Target volume ofunderwriting would be set initially attwenty-five percent (25%) of paid-in capital.(b) Fund mobilization. Emphasisshall be on maturities beyond one (1)year. Domestic and foreign sources shallbe indicated and the latter shall beevaluated in terms of pertinent BSPregulations.(c) Fund usage. Support of priorityinvestment areas of the Government andother projects which may be determinedby the BSP shall be emphasized. Fundsplaced on maturities beyond one (1) yearshall be preferred.(d) Planned distribution of portfolioActivities indicating money-marketservices and investment in subsidiariesand affiliates, while necessary to sustainthe investment house, shall besubordinated to the preferred activitiesabove-indicated. Other activities asfinancial management, counseling,distribution of equity and debentures for"public" ownership, etc., shall beconsidered.(2) The one (1)-year investmentprogram of the investment house shall berelated to the government developmentplan by indicating the portion of theinvestment and savings targets in the planwhich would be supported by theinvestment house industry.(3) A one (1)-year projected incomestatement showing major sources ofincome and expense items.(4) Operational agreement with otherFIs.(5) A statement justifying the operationof the investment house as not in conflictwith public interest and economic growth,taking into account the existing number ofinvestment houses, indicating:(a) record of underwriting;(b) evidence of medium and long-termloans;(c) evidence of obtaining funds withmaturity beyond one (1) year; and(d) equity investments which weresubsequently distributed to the public.Manual of Regulations for Non-Bank Financial InstitutionsQ RegulationsAppendix Q-1 - Page 1