Legal basis and prior circular
- The Circular Letter is issued in line with Circular No. 1318 dated January 3, 1992.
- The Circular Letter operationalizes reconciliation rules to align SB/CB records with CBP records for foreign investors’ holdings.
Reconciliation rule: individual investor balances
- If CBP and the combined SB/CB outstanding share balances for an individual foreign investor in a specific listed security differ, the lesser balance is adopted as the true and accurate balance.
Reconciliation rule: aggregate SB/CB less than CBP
- If the aggregate foreign investors’ balances of SB/CB for a specific listed security are less than the corresponding CBP aggregate balance, the all balances of the SB/CB combined are adopted as true and accurate.
- This aggregate-based adoption applies even if, with respect to the SB/CB combined, some CBP balances would be the lesser.
Reconciliation rule: CBP aggregate less than SB/CB aggregate
- If CBP aggregate foreign investors’ balances for a specific listed security are less than the corresponding aggregate balances of a SB/CB, the Circular Letter requires applying the rule in Item 1.
- Under Item 1, the lesser balance governs for the individual foreign investor in the specified listed security.
Covered institutions and reconciliation scope
- The Circular Letter covers stock brokers and custodian banks (referred to as SB/CB) that maintain records of foreign investor stockholdings.
- The reconciliation applies to foreign investors’ account share balances under SB/CB custody.
- The reconciliation is limited to balances appearing for listed securities within SB/CB records and CBP records.
- The reconciliation concerns balances shown in the records of stock brokers/custodian banks on one hand and the Central Bank (CBP) on the other.
Mandatory reporting and submission deadline
- Stock brokers and designated custodian banks must submit an inventory of investors’ account share balances under their custody.
- The inventory must be as of February 28, 1992.
- Submission must be made on or before April 30, 1992.
- Submissions must be filed with the Central bank through the Foreign Exchange Operations and Investments Department (Attn.: FX Securities Transactions Division).
- The submission must be in the prescribed form.
Cut-off for data submitted late
- Any data submitted after April 30, 1992 will no longer be taken into account in arriving at investors balances.
Adoption and signatory
- The Circular Letter is adopted on March 25, 1992.
- It is signed by JOSE L. CUISIA, JR., Governor.