BSP says law on investment houses is ambiguous

Bangko Sentral ng Pilipinas (BSP) Gov. Rafael B. Buenaventura said yesterday "the law is ambiguous" as to which government agency -- the BSP or the Securities and Exchange Commission (SEC) -- has direct supervision over investment houses.

"The law and an agreement earlier reached by the BSP and SEC still leaves some ambiguity over the supervision of investment houses with the first test case being the Urbancorp Investment Inc.," Buenaventura said.

He acknowledged that while the BSP retains supervision over investment houses with trust licenses, closure of the investment houses cannot be effected without the agreement of the SEC.

What is happening, Buenaventura said, is dual supervision that also leaves the possibility that something "falls between the chairs."

He said the BSP and SEC are trying to come up with another agreement that will be more specific and will likely restore full supervision to the BSP over investment houses except underwriting activities.

The BSP and SEC are set to make a joint statement about the matter today.

Meanwhile, Buenaventura said Puerto Azul Land Inc. (PALI) has not secured a new P450-million loan from Urban Bank just before it declared a bank holiday on April 26.

What PALI secured, according to Buenaventura was an old loan from Urbancorp Investment Inc.

According to Urban Bank president Teodoro Borlongan, Urban Bank had purchased a promissory note of Urbancorp Investment Inc. which enabled Urbancorp to pay ALI. -