PDS Group ties up with First Metro, The Bureau of the Treasury, Thomson Reuters, and MART to promote financial literacy among tertiary schools in the Philippines

Posted on September 5, 2014September 5, 2014 by Celeste Aguda

The PDS Group joined hands with First Metro Investment Corporation (FMIC), the Bureau of the Treasury (BTr), Thomson Reuters, and the Money Market Association of the Philippines (MART) in promoting capital markets awareness and education through the conduct of a virtual trading tournament among college students.

The Bond Trading Challenge will foster broader knowledge and deeper understanding of the essential role that the fixed income securities market plays in the global economy, while also reinforcing financial literacy that will facilitate informed investment decisions for investors.

Treasurer Rosalia V. De Leon, who delivered the welcome remarks, said: “I would like to commend First Metro for doing this exercise. It is a pioneering measure to be able to educate and the same time to raise consciousness amongst our students about the bond market. Hopefully we could also have this kind of engagement later on with FMIC and PDEx. I was also looking forward to another bourse game eventually among our traders being the coaches of these students.”

For his message on behalf of FMIC, the project organizer, FMIC President Roberto Juanchito T. Dispo said: “In line with our advocacy to raise awareness of the Philippine capital markets, we now take the students, the future investors or possibly capital markets practitioners, to another arena where they can practice portfolio investment and management through bond trading. As the leading bond house and fixed income trading and brokering house, we want to share our expertise by giving the students practical experience in the fixed income market,”

PDS Group President & CEO Cesar B. Crisol remarked: “We at the PDS Group are privileged to contribute to the effort for this Bond Trading Challenge, a significant initiative for the overall Investment Literacy Program, empowering students, our future investors and market players, with the basic theoretical and practical aspects of bond trading and portfolio management. Without hesitation, we took hold of this opportunity to bring to the table our end-of-day price and transaction data from the secondary market for fixed income securities toward the successful conduct of the trading tournament.”

“Thomson Reuters is fully committed in ensuring the success of this event. We will be providing the necessary tools, content, and support so that the participants will be able to make sound investment decisions. Our management has expressed much interest given its alignment with our main thrust which is to focus and support whatever activity that will benefit and grow the financial markets,” said Thomson Reuters Senior Manager Miguel B. Marquez.

MART President Reynaldo B. Montalbo, Jr. said: “For the Money Market Association, education has always been one of the main objectives of the association, considering that not everybody knows the fixed income market. Unknown to most people is that it is even bigger than the stock exchange. This contest is of most importance not only to MART but also to all players in the industry because now there is a public venue where all of the information will be presented to the potential investing public and potential professionals within the industry.”

The said parties sealed their commitment through the signing of a Memorandum of Agreement (MoA) on 18 August 2014 at the PDS Group Assembly Hall, The Enterprise Center, Makati City. Present at the signing ceremony and the ringing of the PDS ceremonial bell were Treasurer Rosalia V. De Leon, FMIC President Roberto Juanchito T. Dispo, Thomson Reuters Senior Manager Miguel B. Marquez, and MART President Reynaldo B. Montalbo, Jr., with PDS Group President & CEO Cesar B. Crisol.

The joint effort arose out of the organizations’ shared vision and goal to bring more awareness and information about the fixed income market to the mainstream public and through this specific effort, increase the student-participants’ investment management knowledge. #

PDS Group promotes financial literacy thru Bond Trading Challenge_FINAL

A First in the Philippine Financial Market: RMB Transfers through PDS System

Posted on August 8, 2014September 3, 2014 by Celeste Aguda

08 August 2014, Makati City Philippines – The Philippine financial market witnessed in full swing the country’s first Renminbi (RMB) Transfers executed by the six pioneer banks enrolled in the PDS RMB Transfer System (RTS): BDO Unibank, Inc. (BDO), East West Banking Corporation (EWBC), Land Bank of the Philippines (LBPH), Metropolitan Bank & Trust Company (MBTC), Rizal Commercial Banking Corp. (RCBC), and Security Bank Corporation (SBC). The historic first transfers are expected to herald another banner year for the RMB business and to generate greater participation among market participants.

This milestone event marked the first step for the trajectory envisioned by Bank of China Limited (BOC-MNL) and PDS Group for the creation of the Philippine Domestic RMB market, which started with the signing last October 2013 of the documents that would seal the partnership between the BOC and the PDS Group in the creation of the country’s capabilities to host RMB as a currency of our markets and communities. This alliance has been hard at work in creating the Domestic RMB Community of users that could form the foundation for a broader community and RMB marketplace as these efforts progress. The RMB initiative is seen as a potential vibrant contributor to the improvement of our financial capabilities and the development of the Philippine financial system as a whole.

Leaders in the financial sphere gathered together as participants and witnesses to this event. PDEx member bank representatives sealed their commitments as trailblazers of the Domestic RMB Community, including BDO Executive Vice President Pedro M. Florescio III, EWBC Senior Vice President & Banking Group Head Ernest Uy, LBPH Executive Vice President of Treasury and Investment Banking Sector Rabboni Francis B. Arjonillo, MBTC Senior Executive Vice President and Head of Financial Markets Sector Fernand Antonio A. Tansingco, RCBC President & CEO Lorenzo V. Tan, and SBC Executive Vice President Eduardo Olbes. The mere push of a button using this new infrastructure will enable members of this community to transfer RMB funds from the Philippines to cross border destinations in China and around the world.

With BOC-MNL and PDS Group’s strategic alliance, further projects await our RMB market in the Philippines that will expand opportunities for our financial sector. Future plans include the trading of RMB in our domestic foreign exchange market, and later, the trading of RMB-denominated fixed income securities in the bond market. #

A first in the Philippine Financial Market – RMB Transfers through PDS System FINAL

Developing the local bond market

Posted on March 31, 2014 by Celeste Aguda

Point of Law

Developing the local bond market

By Francis Ed Lim
Philippine Daily Inquirer

4:21 am | Thursday, March 27th, 2014

Last Tuesday at the Makati Shangri-La Hotel, the law firm of Latham & Watkins sponsored a conference on the Philippine bond market. The theme of the conference was “Gaining the Edge: How Leading Philippine Companies Are Using Bonds to Their Advantage.”

Our panel, composed of Ayala Land’s Toti Bengson, BDO’s Ed Francisco, BPI Capital’s Dennis Montecillo, ABS-CBN’s Ric Tan, Picazo Law’s Gabby Dee, and Latham & Watkin’s Helena Kim, tackled the issue: “What Is Happening to the Peso Bonds: A Report on the Development of the Domestic Bond Market.”

Our bond market has grown by leaps and bounds in recent years. As pointed out by my friend, Cesar “Jing” Crisol, president and chief executive officer of the PDS Group, on the corporate front alone, there are, as of February 2014, 24 issuers with 65 securities listed with the PDS Group with an outstanding amount of over P400 billion. Back in 2005, when listing and trading of corporate bonds started, there were only two issuers with securities worth P10 billion.

I was asked about my thoughts on the regulatory and legal developments. I pointed to several capital market-related laws which, incidentally, I helped put in place when I was president of the Philippine Stock Exchange.

Pera Law

The first law that can definitely help develop the local bond market is Republic Act No. 9505, otherwise known as the Personal Equity and Retirement Account Act of 2008, or Pera. Envisioned as the local version of 401K system of the United States, this law seeks to establish a voluntary retirement program for individuals. Individual and married couples may contribute P100,000 and P200,000 per year, respectively, to their personal retirement account. If the contributor is an overseas Filipino, the tax-eligible cap goes up to P200,000 per individual and P400,000 per couple.

The law aims to develop the local capital markets, which includes the bond market. It gives the following benefits to the contributor:

1. The contributor is entitled to claim income tax credit equivalent to 5 percent of his total Pera contributions for the year.

2. Income from Pera investment products (like government securities and exchange traded bonds) is tax-free.

3. No portion of the Pera assets (including investments and their income) may be assigned, alienated, pledged, encumbered, attached, garnished, seized or levied upon.

4. Pera assets shall not be subject to estate tax upon the death of the contributor.

Cisa Law

The second law is Republic Act No. 9510, otherwise known as the Credit Information System Act (Cisa). This law seeks to establish a comprehensive and centralized credit information for the collection and dissemination of fair and accurate information relevant to, or arising from, credit and credit-related activities.

Cisa addresses the need for reliable credit information concerning the credit standing and track record of borrowers as a means of protecting lenders and other investors.

Fria Law

Another law that will contribute to the development of the local bond market is Republic Act No. 10142, otherwise known as the Financial Rehabilitation and Insolvency Act of 2010 (Fria).

Not known to many, Fria contains several capital market-friendly provisions. For example, it gives the borrower (issuer) and its creditors (e.g., bondholders) more flexibility to restructure the former’s obligations in case of insolvency.

Aside from the traditional court-supervised rehabilitation, Fria authorizes pre-negotiated rehabilitation. Under this mode, if the issuer can secure the approval of its creditors holding at least two-thirds of its total liabilities, it can restructure its obligations at a much faster pace than through court-supervised rehabilitation. In this type of rehabilitation, the court has a maximum period of 120 days from the filing of the petition to approve the restructuring plan, failing which the plan is deemed approved.

Thereafter, the terms and conditions in the restructuring plan are binding on all the creditors, including the non-participating or objecting creditors provided that more than 50 percent of each class of creditors (secured and unsecured) consent to the restructuring plan.

More than that, Fria allows out-of-court restructuring where the restructuring plan shall bind all the creditors if the debtor is able to secure 85-percent creditor approval, with 75 percent of unsecured creditors’ and 67 percent of secured creditors’ approval.

There are other provisions in Fria that are conducive to the development of the bond market, like absolute priority in favor of bondholders on trade-related assets of market participants (e.g. underwriters and brokers) and exemption of clearing and settlement of financial transactions through clearing agencies from the coverage of a stay order.

SEC issued Memorandum Circular No.14, s. 2006

In 2006, the Securities and Exchange Commission (SEC) issued rules governing OTC (over the counter) markets which included government securities. The circular provides that “no broker or dealer shall participate in an OTC market unless said broker or dealer is a member of a self-regulatory organization (SRO) that has been registered with the [SEC].”

In November 2007, the SEC expanded the SRO registration of the PDEX, which is our fixed income exchange, to cover the inter-professional market.

In January 2008, PDEx was granted an SRO status for the OTC market which resulted in the coverage of all government securities trading activities.

These regulations strengthened the PDEX as a trading venue for the debt market. As data indubitably show, we can now truthfully say that we have a vibrant and growing fixed income market, which is now serving the good of the economy and the country.

(The author, formerly the president of the Philippine Stock Exchange, is now a senior partner of the Angara Abello Concepcion Regala & Cruz Law Offices (AccraLaw). The views expressed in this column are solely his and should in no way be attributed to AccraLaw. He may be contacted at francis.ed.lim@gmail.com.)

CBCrisol Presentation – Philippine Bond Conference(445612_1_HK) release

Bank of China Limited, Manila Branch and PDS Group Ink Agreements to Bring the RMB Currency to the Philippine Financial Market Infrastructure

Posted on October 21, 2013November 27, 2013 by pds website administrator

Makati City, Philippines – The Bank of China Limited, Manila Branch (BOC-MNL) and the PDS Group jointly celebrated the execution of agreements on October 21 at the Makati Shangri-La Hotel that will activate the Domestic Renminbi (RMB) Transfer Service in the Philippines. Their strategic alliance was sealed on further projects to enable the trading of RMB in our domestic foreign exchange market, and later, the trading of RMB-denominated fixed income securities in the bond market.

The occasion was graced by the Ambassador of the People’s Republic of China to the Philippines Madame Ma Keqing, and Bangko Sentral ng Pilipinas Deputy Governor Diwa C. Guinigundo, who joined the festivities welcoming the new Transfer Service that would improve efficiency through real-time RMB transfers among participating Philippine banks, reduce friction costs for trade related payments, and extend service hours for RMB payments done within the Asian Region.

This partnership draws from BoC’s role in key activities in the Offshore and Onshore RMB Payment Systems and PDS Group’s experience in operating the domestic foreign currency transfer system for the Philippine financial market.

BoC Group’s Chief Operating Officer, Mr. Yang Shihua, stated, “In the face of the numerous business opportunities brought about by RMB internationalization, BoC would like to cooperate ever more closely to build an RMB market in the Philippines. At last, I wish a successful operation of the BoC-PDS RMB clearing system and a flourishing business of all the friends from the financial sector and industrial and commercial circles present here today,”

For his part, PDS Group CEO Cesar B. Crisol said in his keynote speech, “We are grateful to partner with BoC in bringing our initiatives to give robustness, resiliency and vigor to our financial market. Our collective drive and hard work has come to fruition. We look forward in implementing the next two phases for the development of Domestic RMB Service suite. For PDS Group, RMB is just the first of other foreign currencies to be added to the Domestic Transfer System. With these pursuits, PDS hopes to duplicate the same level of professional cooperation and spirit of partnership that it has experienced with BoC with other Cash Settlement Banks.”#

Bank of China Limited, Manila Branch and PDS Group Ink Agreements to Bring the RMB Currency to the Philippine Financial Market Infrastructure

The National Association of Securities Broker Salesman, Inc. (NASBI) celebrates 4th Annual General Meeting and Convention: Empowering Broker Salesmen in the Philippines’ Fast Growing Markets Towards a More Vibrant Investing Public

Posted on July 15, 2013November 27, 2013 by pdsadmin

The PDS Group celebrated with the National Association of Securities Broker Salesman, Inc.’s (NASBI) 4th Annual General Meeting and Convention: “Empowering broker salesmen in the Philippines’ fast growing markets towards a more vibrant investing public,” last July 13, 2013 at Taal Vista Hotel, Tagaytay City.

Philippine Dealing & Exchange Corp. (PDEx) President & COO Cesar B. Crisol expressed PDS’ support to NASBI by highlighting its Broker Empowerment Initiatives – equipping Broker Salesman with tools that enable them to service customers on the basis of real-time information and to place and execute customer orders with speed and efficiency. PDS renders FI-Broker Workstations at no additional cost to enable Broker Salesmen across the Philippines to access up-to-the-minute market information, perform best execution and conduct market surveillance anytime regardless of their location. Continuing Market Education and Development Programs will likewise provide learning facilities offering a diversified knowledge base in financial markets.

Unified by a common thrust of Investor Protection, PDS Group and NASBI will continue to join hands in developing a transparent and efficient financial system for investors nationwide.

The event was also graced by the Treasurer of the Philippines Rosalia V. De Leon, who in her keynote speech commended NASBI for the efforts exerted the past four years in promoting international best practices, investor protection, and the welfare of our fixed income salesmen.

The Treasurer expressed great confidence in the Philippine market’s ability to face the challenges that confront it, assuring the community present that, “We have done this before, and there is no reason to believe that we can’t do it again. I say this not out of overconfidence, but rather out of a firm belief in our financial system and the very foundation it sits on. In other words: our fundamentals are solid.”

She then arrayed the various initiatives under their wing, hoped to further strengthen the fundamental underpinnings of the market and bring resilience and robustness to market activity. She mentioned their current focus on benchmarking practices, and spoke about their efforts to bring the taxable and tax-exempt communities together in the marketplace, for increased buoyancy and liquidity in our secondary markets.

PDS supports these initiatives as solid footsteps in taking advantage of our market fundamentals and bringing us beyond our domestic borders and into the next wave of our evolution. The Treasurer said it well when she said: “We are in the process of preparing for the possible integration of our bond market with those of our ASEAN neighbours. We are very excited about this initiative, which is why we are taking all the necessary steps to ensure its successful implementation.”

The National Association of Securities Broker Salesman, Inc. (NASBI) celebrates 4th Annual General Meeting and Convention Empowering Broker Salesmen

PDS Group activates PDSClear

Posted on July 15, 2013November 27, 2013 by pds website administrator

The Philippine Dealing System (PDS), the country’s fully-integrated bond market, formally activated on July 15, 2013 the much-anticipated “PDSClear”, its quicker and more resilient clearing system. PDS proudly launched the new PDSClear to replace its previous system, the expanded Delivery versus Payment system, allowing users a new customer experience through a simple yet comprehensive platform. It is a secure web-based securities and payments clearing system with multi-asset and multi-currency capabilities and can link to multiple settlement locations for both cash and securities. PDSClear will do away with the inconveniences of its predecessor system with its user-friendly web-based system that can accommodate extensive user concurrency without running the risk of systemic disruptions.

“We at the PDS Group simply want the best for our market community by providing them with a marketplace anchored on the best that technology has to offer. Our inward focus this year is hoped to bring greater efficiency to the market, and we are committed to providing our members with the tools they need to realize this objective. We were pleased to see the market come together and embrace this infrastructure upgrade. PDSClear is just one of the components of our infrastructure program and we will be unfolding more of these infrastructure strengthening initiatives over the course of the year,” remarked PDS Group Managing Director Cesar B. Crisol.

“It’s all systems go for this brand-new and fully backed up clearing system. Our back-office community of users will experience a faster, more convenient and robust system, with enhanced navigation facilities, streamlined authorization functions and improved monitoring tools,” said Caesar Parlade, managing director of the PDS Group. He thanked all market participants for their cooperation during the series of training and mock sessions held by the PDS since the start of the year to perfect the system.

Vicente B. Castillo, President and CEO of the PDS Group, expressed satisfaction over the upgrading of the clearing system for bond trades. He said, “The launch of PDSClear brings us closer to meeting global infrastructure standards and we embrace the opportunities of this new technology with open arms. The gains we as a market can achieve with resiliency and scalability allows us to have a platform that will grow in parallel with our markets.”

Monday’s launch was just the first phase in modernizing the infrastructure for seamless consummation of all bond trades. The second phase of the modernization process will integrate, among other things, the Foreign Exchange-Straight through Processing system, or FX-STP for the clearing of foreign currency trades into PDSClear and provide a tremendous opportunity to enhance liquidity management for the PDS members with the new system’s multilateral netting capability.

PDS Group Activates PDSClear