PDTC gets license as transfer agent for scripless trading

The Philippine Depository & Trust Corp. (PDTC), formerly the Philippine Central Depository Inc., has secured a license from the Securities and Exchange Commission (SEC) to operate as a transfer agent.

The approval, however, was subject to a number of conditions to ensure that PDTC’s operation as a depository of securities or any of the functions regulated by the SEC are not imperiled.

The issuance of the license, according to the SEC, shall give PDTC the opportunity to solicit business with prospective clients before actual operation even as it completes the additional requirements.

PDTC plans to act as registrar/transfer agent only for companies that will issue equity or debt securities in scripless form.

The SEC said PDTC is a multi-tasks performing entity, which if not checked, may give rise to conflict of interest situation.

In order to safeguard the interest of the investing public, the SEC said the PDTC should submit a risk management plan detailing its operational structure, its "Chinese wall" or segregation of duties between and among the different operating units, its back-up plan and its contingency and rapid recovery plan.

The operational structure should include the organizational chart, the various positions and their responsibilities in each of the operating units (depository, custodianship, intermediary and transfer agency), and the name of persons who occupy said positions. PDTC should be made to define the relationships that exist between and among these units.

The PDTC has also been required to submit a detailed description of the electronic books and records and the automated system that will house said books and records.

Apart from this, PDTC has been required to submit an undertaking that it shall allow its system to be connected, if necessary, with the system of other entities in order to ensure the prompt and accurate clearance and settlement of relevant trades.

Should PDTC seek recognition from the Bangko Sentral ng Pilipinas, it should be mandated to report promptly to the SEC any investigation and sanction that BSP may impose against it pursuant to its transfer agency/registry functions.

PDTC has an authorized capital stock of P400 million, P287.5 million of which has been subscribed and P259.375-million paid-up.