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Securities Services
Depository
It serves both the Equity and Debt markets providing secure settlement, core safekeeping and corporate action activities for community members. It also provides electronic, real-time access for members to keep track of balances under guardianship. It is capable of performing tax services for both the equities and fixed income markets.
It has depository authority from the SEC for its market functions and a trust license from the BSP for its fiduciary and post-settlement functions.
As a master custodian for the market, PDS Depository aims for heightened public protection and market integrity.
As a depository for the equities market, PDTC centralizes management of shareholders information through dematerialization. Dematerialization eliminates the need to deliver paper certificates for securities traded, hence it eliminates the risk associated with maintaining physical certificates and speeds up the processing and settlement of a trade transaction. The depository services for the fixed income securities market are provided for securities issued in scripless form.
The securities held in the depository are registered under the legal name of “PCD Nominee” for equity and “PDTC Nominee” for fixed income securities with the beneficial ownership reflected via book-entry credits to its securities accounts of the depository participants in the depository system.
Lodgement refers to the deposit of eligible securities into the PDTC Depository. Securities lodged are deemed fungible and eligible for book entry settlement and for other types of transactions such as transfers, pledges or encumbrances. Legal title to the securities is registered under the Depository Nominee but is beneficially owned by the Participants or by the Participants’ clients.
Pledge is an electronic process by which securities can be flagged to serve as an accessory to a contract intended as collateral to a principal obligation.
Pledge Initiation
The process will commence with the pledgor- participant entering the pledge instructions in the system. The pledgee- participant will confirm the entries made by the pledgor- participant consistent with their pledge agreement. PDTC shall have no obligation to verify the terms of the Pledge or compliance therewith by either party thereto. Securities that have been pledged are flagged in the pledgor’s securities account and shall not be eligible for any transaction unless confirmed by the pledgee- participant. All dividends, rights and entitlements due for the pledged securities shall pertain to the pledgor- participant.
Pledge Closure
This shall pertain to the full release of the pledged securities upon the agreement of both the pledgor/ pledgee- participant.
Corporate Action refers to an action taken by an issuer as a corporate entity requiring (mandatory events) or involving the participation (voluntary events) of the holders of its Securities, such as but not limited to shareholders meetings, interests, dividends, redemptions and right offerings.
PDTC computes the entitlements for all securities lodged with the Depository. The amount of entitlement for lodged securities in respect of a Corporate Action shall be determined based on:
- Total number, as of Record Date, of the proper Securities registered in the name of Depository Nominee
- The number, as of Record Date, of the proper Securities in the Securities Account of each Participant, as computed and confirmed by the Transfer Agent and reconciled by PDTC, rounded down to the nearest whole number or centavo as the case may be.
Entitlements are paid and distributed by PDTC Depository by crediting the bank account and/or the securities account of the Participants.
Upliftment refers to the withdrawal of securities from the PDTC Depository. Upon entry of the Uplift instructions by the Participant, the Securities sought to be uplifted shall be frozen in the Participant’s Securities Account and shall no longer be eligible for Settlement through the PDTC System.
The Uplift Instruction may be cancelled by the Participant at any time prior to its confirmation by PDTC. Upon confirmation from the Transfer Agent or Registry that the Securities have been deducted from the holdings of the Depository Nominee, the uplifted securities shall be debited from the Securities Account of the Participant.
Registry
The Registry provides a suite of services for recordkeeping and maintains the official record of registered holders for issuers. Issuers may avail of this service bundled with payment services, enabling the registry to perform payments to holders on record, on behalf of the issuer.
This service can also be used to support an issuer’s existing registry infrastructure to deepen its capabilities with the PDS Registry capacities for an integrated marketplace that allows trading across tax classes and recording of foreign currency denominated securities.
As a Registry, PDTC establishes, maintains, and updates the records of ownership of Securities. The Registry Account shall reflect the balance of Securities owned by the Registered Holder resulting from purchase in a primary issuance of Securities or from sale or transfer or assignments as well as annotations such as pledge or lien.
PDTC Registry computes the entitlements of each Registered Holder of the Securities for which the Issuer of Securities is taking action as of the defined Record Date. It also computes the corresponding withholding taxes based on the tax rates as declared by the Registered Holder and on the instruction of the Issuer of Securities.
As a Paying Agent, PDTC ensures distribution of periodic dividend, interest and principal payments to registered holders on record on behalf of the issuer. Payments are made via credit to the bank accounts (nominated PDS-Accredited Settlement Banks of the Registered Holders) on the issuer’s declared payment date.
Upon submission of required documents for pledge from both the pledgor and the pledgee, PDTC Registry can effect recording or annotation of interests or liens on the Securities of any Registered Holder in the Registry arising from transactions such as but not limited to pledge or escrow.
Sub-registry
PDTC renders sub-registry services for domestically issued foreign currency denominated instruments, issued by the Bureau of the Treasury, namely the Multi-Currency Retail Treasury Bonds and the Onshore Dollar Bonds. These services make possible the unrestricted trading and settlement of issues in the organized market, allowing the instrument to trade across different tax categories through a Corporate Action Auto Claim (CAAC) System. The CAAC System provides the Sub-Registrar the information it requires to accurately compute the appropriate amount of taxes on payment dates.
PDTC is the Sub-Registry of the Bureau of the Treasury’s Registry of Scripless Securities (RoSS), providing system administration and help desk support services to the direct account holders and RoSS Sponsors. It also supports BTr-RoSS Operations Unit in generating reports, processing coupon and maturity payments and maintaining account details.
Value Management
PDS Value Management provides key fiduciary activities intended to optimize Members’ utilization of the securities held under guardianship at the Depository. These activities support PDS REPO and PDS SECLEND programs and offer bilateral agreements (e.g. pledge or collateral) to PDS Members.
It ensures adequacy of transaction cover against transaction values protecting parties to a transaction and the market at large.
Collateral Management System Operator
PDTC has been accredited to operate a Collateral Management System, which accepts all eligible assets intended to cover transactions under the PDEx Inter-Professional Repurchase Agreement Market Program and PDEx Securities Lending Transactions Program under a transfer of title legal arrangement.
As Collateral Manager, PDTC’s services monitor the adequacy of transaction cover against transaction values, on the basis of contractually agreed levels and methodologies, protecting both parties to the transaction as well as the market at large. These services can also alleviate temporary stresses in the cash markets that could lead to failed settlements, thus strengthening securities distribution channels.