Question & AnswerQ&A (SEC)
The Net Capital Rule sets requirements for the calculation of capital for brokers and dealers to ensure financial stability and compliance with minimum capital standards.
The allowable initial margin percentage is raised from 40% to 50% of the current market value of the security at the time of the transaction.
All subordinated loan agreements must be approved by the Philippine Stock Exchange for members of the Exchange.
The two main types are subordinated loan agreements and secured demand note agreements.
Collateral Value is the market value of securities pledged as collateral, reduced by 30%, except for securities issued by the Republic of the Philippines which have different deduction percentages.
The minimum maintenance margin is 25% of the current market value of all securities 'long' in the account.
The broker or dealer must liquidate securities sufficient to meet the margin call or eliminate the margin deficiency through the Exchange or best available public market.
Subordination agreements shall not be subject to cancellation, termination, rescission, or modification by mutual consent if such action is inconsistent with the requirements of the Net Capital Rule and related rules.
Two copies of any proposed subordination agreement must be filed 30 days prior to execution, including a statement detailing the lender's identity and relationship to the broker or dealer.
A filing fee of P3,000.00 and other applicable fees are collected upon filing the application.
A transfer agent must be a corporation or partnership, have paid-up capital of at least P500,000.00, have a CPA partner or officer, and have a signed agreement with the Philippine Central Depository, Inc.
Any delays in processing, discrepancies between records, loss of securities, or cessation of transfer agent functions must be reported.
Brokers must determine beneficial owners and furnish transfer agents with sworn statements within 31 trading days after the dividend record date.
The clearing agency must immediately notify the SEC with documentation or evidence of the breach or difficulties.
No action needs to be taken by the broker or dealer if the margin deficiency is less than P10,000.