IMPLEMENTATION OF THE DELIVERY BY THE SELLER OF SECURITIES
DIRECTLY TO THE BUYER OR TO HIS DESIGNATED SECURITIES
CUSTODIAN/CENTRAL SECURITIES DEPOSITORY
Appendix to Secs. 431, 242 on Delivery of Securities and Repurchase Agreements Covering Government Securities, Commercial Papers and Other Negotiable and Non-Negotiable Securities or Instruments,
245 on Delivery of Securities, and 431 on Registry of Scripless Securities of the Bureau of the Treasury
a. If the securities sold are certificated, delivery shall be effected physically to the purchaser, or to the purchaser’s designated Bangko Sentral -accredited custodian. The certificate must be transferred to and registered under the name of the purchaser and properly recorded in the registry book.
b. Delivery of immobilized or dematerialized securities shall be effected by means of book entry transfer to the appropriate securities account of the following: (1) purchaser in a registry of said securities; (2) purchaser in an SEC authorized central securities depository; or (3) purchaser’s designated Bangko Sentral accredited securities custodian. Book-entry transfer to a sub-account for clients under the primary account of the dealer will not be deemed compliant with this requirement.
TEMPLATE OF LETTER TO INVESTOR
a. If the security is evidenced by a certificate of indebtedness, the certificate must be transferred in the name of the purchaser/buyer and physically delivered to the purchaser/buyer or to his designated Bangko Sentral -accredited third party custodian.
b. If the security is immobilized or dematerialized (i.e., that the security is not evidenced by a certificate of indebtedness and instead security account is created in the electronic books of the registry in the name of the purchaser/buyer or his designated custodian):
(1) The security must be delivered by book-entry transfer to the appropriate securities account of the buyer in the registry of said securities which must be evidenced by a confirmation in writing by the registrar to the buyer. The confirmation of sale or document of conveyance shall be physically delivered by the seller or dealer to the buyer, or
(2) The security must be delivered by book-entry transfer to the appropriate securities account of the Bangko Sentral-accredited third party custodian designated by the buyer/purchaser in the registry of said securities which must be evidenced by a confirmation in writing by the registrar to the said Bangko Sentral -accredited third party custodian, who shall in turn issue to the securities owner a delivery receipt acknowledging receipt of the securities.
a. Full control and possession of the securities purchased;
b. Independent validation of the existence of securities purchased;
c. Regular reporting of securities holdings; and
d. Capability to choose most competitive counter-parties in case of sale, pledge, transfer, and lending of securities.
Very truly yours,