MORNBFI Vol. 1 - Planters Development Bank

APP. Q-3811.12.31IMPLEMENTATION OF THE DELIVERY BY THE SELLER OF SECURITIES TO THEBUYER OR TO HIS DESIGNATED THIRD PARTY CUSTODIAN[Appendix to Secs. 4441Q and 4144N and Subsecs. 4101Q.4, 4235Q.5(2008 - 4211Q.4) and 4103N.3]Section 1. Statement of Policy. Pursuantto the policy of the BSP to promote theprotection of investors in order to gain theirconfidence in the securities market [asenunciated under Circular Nos. 392 and428 dated 23 July 2003 and 27 April 2004,]respectively, the following rules/guidelines shall be observed by banks andNBFI under BSP supervision in theirdealings in securities whether they areacting as seller, buyer, agent or custodian.The disposition of compliance issuesof this Appendix is shown in Appendix 68a.The guidelines on the delivery ofgovernment securities by the sellingbank to an investor’s Principal SecuritiesAccount with the RoSS through the ClientInterface System facility are in Appendix68b.Sec. 2. Distinction Between a Custodianand a Registry. A securities custodian is aBSP-accredited QB/NBFI under BSPsupervision that is authorized to engage ininvestment management (for investmenthouses with quasi-banking authority only)or trust business and is designated by theinvestor to perform the functions ofsafekeeping, holding title to the securitiesin a nominee capacity, reports rendition,mark-to-market valuation, collection andpayment of dividends, interest earnings orproceeds from the sale/redemption/maturityof securities held under custodianship andrepresentation of clients in corporateactions.It may also perform the value addedservice of securities lending as agent,subject to the conditions specified underSubsec. 4441Q.6.Sec. 3. Registry of Scripless Securities ofthe Bureau of Treasury. The Bureau ofTreasury, as operator of the RoSS, whichserves as the official registry for governmentsecurities, is not subject to BSP accreditationand is exempted from the independencerequirement under the existing BSPregulations.Sec. 4. Delivery of Securities. Pursuant toexisting BSP regulations, securities sold ona without recourse basis shall be deliveredby the seller to the purchaser, or to hisdesignated BSP-accredited custodianwhich must not be a subsidiary or affiliateof the issuer or seller.Sec. 5. Mode of Delivery. If the securitiessold are certificated, delivery shall beeffected physically to the purchaser, or tohis designated BSP-accredited custodian.The certificate must be transferred to andregistered under the name of the purchaserand properly recorded in the registry book.On the other hand, delivery ofimmobilized or dematerialized securitiesshall be effected by means of book entrytransfer to the appropriate securitiesaccount of either: (1) the purchaser in aregistry of said securities; or (2) thepurchaser’s designated custodian in aregistry of said securities. Book-entrytransfer to a sub-account for clients underthe primary account of the seller will notbe deemed compliant with thisrequirement. The delivery must besupported by a confirmation of book-entrytransfer to be issued by the securitiesregistry in case of name on registry or by aconfirmation receipt to be issued by theManual of Regulations for Non-Bank Financial InstitutionsQ RegulationsAppendix Q-38 - Page 1