Buying and Selling on the Secondary Market

Generally, corporate debt issues in the Philippines are held by investors to maturity. An investor may buy and sell commercial papers or corporate bonds with registered Securities and Exchange Commission (SEC)-licensed dealers. Secondary market trading for commercial papers and corporate bonds is extremely thin with almost no interbank trading. There are no price-making commitments among issuers, underwriters, or selling agents.

Investors are required to have an existing investment account with their dealer. An investor buying from the secondary market receives a Confirmation to Purchase (COP) from the dealers containing the description of debt security purchased. Dealers account for transactions to clients by issuing a Confirmation of Purchase or Sales and other documentary proof. Trades in the Long Term Commercial papers (LTCPs) and corporate bonds are settled on transaction day (T+0).

Different dealers may use varying payment and settlement arrangements, as they use different means for accepting and processing applications. Investors should contact their dealer for specific trading procedures, and details on fees.

Payment of principal and bond redemption is done either through by directly crediting an issuer designated bank account or by checks issued by the Paying Agent.

Payment of principal and interest can be made to the either if the registered bondholder or bearer of the debt security