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PRESIDENTIAL DECREE NO. 678
PRESIDENTIAL DECREE NO. 678 -
AMENDING Section 2 OF COMMONWEALTH ACT NO. 83, AS AMENDED OTHERWISE
KNOWN AS THE SECURITIES ACT
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WHEREAS,
commercial papers such as promissory notes, repurchase agreements,
certificates of participation or assignment, commercial drafts,
acceptances and similar instruments issued by persons, firms, or
entities to obtain working capital in short-range maturities are not
covered by the present registration requirement of the Securities and
Exchange Commission; chanroblesvirtualawlibrary
WHEREAS, the credit risk varies among this class of papers depending
upon the financial standing of the particular issuer and the purchasing
investors having no means for extensive credit investigation primarily
base their credit reliance upon the reputation of the commercial paper
dealer;chanroblesvirtualawlibrary
WHEREAS, the investigating public must be given adequate and effective
protection in availing the credit of the borrower in the commercial
paper market by having the public evaluation of the worthiness of the
paper and the capability of the issuer through the registration and/or
licensing of the debt instrument, the registration of the issuer/dealer
and the regulation of the transaction.
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines,
by virtue of the powers vested in me by the Constitution, do hereby
decree and order that:cralaw:red
Section 1. Section 2 (a) of Commonwealth Act No. 83,
as amended, is hereby amended by inserting additional terms under the
definition of "Securities" to read as follows:cralaw:red
"Commercial papers evidencing indebtedness of any person, financial or
non-financial entity, irrespective of maturity, issued, endorsed, sold,
transferred or in any manner conveyed to another, with or without
recourse, such as promissory notes, repurchase agreements, certificates
of assignments, certificates of participations, trust certificates or
similar instruments." chanroblesvirtualawlibrary
Section 2. Section 4 of Commonwealth Act No. 83, as
amended, is hereby amended by inserting as additional paragraph
thereto, which shall read as follows:cralaw:red
"Notwithstanding the provisions of the preceding paragraph regarding
exemptions, and any other provision of this Act or other existing laws,
commercial papers as defined in Section 1 hereof shall be registered in
accordance with the rules and regulations that shall be promulgated by
the Securities and Exchange Commission, after approval by the Monetary
Board which shall also have the power of suspension in the enforcement
of these provisions, it being understood that such rules may provide
for opened registration provided certain limits be made in the public
interest and for the protection of investors. The rules may also
provide exemptions from registration of inter-bank call loans under
such guidelines as may be necessary in the interest of the public."
Section 3. All laws, or regulations inconsistent
herewith are hereby repealed or modified accordingly.
Section 4. This Decree shall take effect upon
approval.
DONE in the City of Manila,
this 2nd day of April, in the year of Our Lord, nineteen hundred and
seventy-five.
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