New rules on foreign firms’ security deposits approved

New rules on foreign firms’ security deposits approved


RULES COVERING securities deposit requirements for foreign firms operating in the country have been made more explicit by regulators.
  
In a memorandum circular dated May 7, the Securities and Exchange Commission (SEC) approved changes to the Guidelines on Securities Deposit of Branch Offices of Foreign Corporations, superseding a 1982 directive covering the same.


The new guidelines aim to ensure that foreign firms are able to "settle their obligations incurred within the Philippines, and to ensure compliance with investment requirements."


The memorandum will apply to the licensed branch offices that have to deposit, within 60 days of obtaining their SEC permits, securities worth at least P100,000, with additional securities to be submitted if gross income exceeds P5 million in a particular year or if the papers’ value declines by 10% or more.


Not covered are foreign banking, insurance and non-stock corporations; foreign firms with representative offices; and regional headquarters of registered multinationals.


Securities that may be used were identified as including government debt instruments as well as stocks in registered enterprises, domestic corporations, domestic insurance corporations and banks licensed by the Bangko Sentral ng Pilipinas. -- Franz Jonathan G. de la Fuente