New eligibility criteria for participation in the primary auction of government securities

CIRCULAR LETTER Series of 1995

TO : All Financial Institutions

Attached, for your reference and guidance, is a copy of the letter of the Secretary of Finance, dated 14 November 1995, relative to the new eligibility criteria for participation in the primary auction of government securities. This supersedes the BSP Memorandum Circular dated 3 May 1994.

ALBERTO V. REYES Deputy Governor

November 14, 1995

MR. GABRIEL C. SINGSON Governor Bangko Sentral ng Pilipinas Roxas, Manila Dear Gov. Singson:

As part of our policy to democratize the government securities dealership and spur competition and enhance efficiency of the government securities market, we shall discontinue the practice of formally accrediting government securities dealers.

Henceforth, any Financial Institution licensed by Bangko Sentral ng Pilipinas or Insurance Commission or the Securities and Exchange Commission to deal in securities may be eligible to participate in the primary auction of government securities as long as they meet the following criteria:

Unimpaired paid-in capital and earned surplus of at least P100 Million at any one time;

The institution is in good standing; and

The institution shall have an account with Bangko Sentral where the settlement of the award may be debited in order to avoid making the deposit prior to bidding.

The Bureau of the Treasury, as the fiscal arm of the National Government, will simply rely on the certification of the Bangko Sentral ng Pilipinas or Insurance Commission and or the Securities and Exchange Commission, attesting to the fact that criteria A and B as set forth above have been satisfied by aspiring securities dealers under your respective area of jurisdiction and governance.

Thank you.

Very truly yours,

ROBERTO F. DE OCAMPO Secretary