Question & AnswerQ&A (PRESIDENTIAL DECREE NO. 129)
The decree is titled "The Investment Houses Law."
Any enterprise which engages in the underwriting of securities of other corporations is considered an Investment House.
Yes, the decree does not preclude enterprises from engaging in the mere buying and selling of short-term securities of other persons or enterprises.
Underwriting is defined as the act or process of guaranteeing the distribution and sale of securities of any kind issued by another corporation.
The majority of the voting stock of any Investment House shall be owned by Philippine citizens, and the majority of the members of the Board must also be citizens of the Philippines.
No director or officer of an Investment House shall concurrently be a director or officer of a bank, and in no case can a person be authorized to be concurrently an officer of both.
The minimum initial paid-in capital is twenty million pesos (P20,000,000).
Investment Houses have several powers including underwriting securities, participating in syndicates, acting as financial consultants and advisers, managing portfolios, promoting and assisting economic ventures, and acquiring properties necessary for business objectives.
Investment Houses may be fined up to two hundred pesos (P200) per day for every day a violation continues, and their certificate of registration may be suspended. Officers or directors who authorized the violation shall be solidarily liable.
Yes, they are subject to relevant provisions of the Corporation Law insofar as they are not inconsistent with this decree and to regulations of the Securities and Exchange Commission and the Central Bank.
The Monetary Board may regulate Investment Houses on non-bank financial intermediary matters, determine if they may perform quasi-banking functions, require certificates of authority, impose liquidity reserves, capital risk ratios, interest ceilings, and conduct special examinations.
They must comply within one year following the approval of the decree, with information sheets to be filed within six months.
They must submit semi-annual reports of operations and financial condition to the Securities and Exchange Commission and the Central Bank, signed and verified by their chief accountant and president.
Yes, they may engage in such business without obtaining a separate license required under Section 14 of the Securities Act.
The invalidity of any provision shall not affect the other provisions which can be given effect without the invalid ones; the provisions are declared separable.