71 OG No. 16, 2226 (April 21, 1975)

[ PRESIDENTIAL DECREE NO. 678, April 02, 1975 ]

AMENDING SECTION 2 OF COMMONWEALTH ACT NO. 83, AS AMENDED OTHERWISE KNOWN AS THE SECURITIES ACT.

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;

WHEREAS, the credit risk varies among this class of papers
depending upon the financial standing of the particular issuer and the
purchasing imentors having no means for extensive credit investigation
primarily base their credit reliance upon the reputation of the
commercial paper dealer;

WHEREAS, the investing 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:

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:

"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."

SEC. 2. Section 4 of Commonwealth Act No. 83, as amended, is
hereby amended by inserting an additional paragraph thereto, which
shall read as follows:

"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 to necessary in the interest of the public."

SEC. 3. All laws or regulations inconsistent herewith are
hereby repealed or modified accordingly.

SEC. 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.

Source: Supreme Court E-Library