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Ask Us
If you have questions you would like to ask please email them to fidelity@compass.com.ph

FAQs


1. What is the Direct Registry project?
The Philippine Association of Stock Transfer Agents (PASTRA) aims to integrate the data sources of its members to provide:
• Trade verification ability to PSE
• Electronic, direct registration of trade in investor's name
• Unified shareholders information


Click here to see the EDR Diagram


2. Is EDR consistent with global trends in capitals markets?
Absolutely.
• Global investors are moving towards 24hrs x 7 days/week operating environments (STP).
• Global investors demand lower operating risks in the markets they operate in.
• Global investors need more accurate, timely and complete information.
• Global investors desire G-30 compliant markets (i.e. true DVP, scripless, name on registry)
• Regional equity markets will emerge and follow the same trend that characterized banking as it went global. already, we see this in Singapore and Malayasia.

3. What is Straight Through Processing (STP)?
Straight Through Processing is a concept of accelerating the flow of cross-border trade information that will make T+1 feasible. This facilitates automation at all levels of the industry. In other words, it is an electronic platform from inception of trade settlement.

4. How can the shareholders information be unified?

The shareholders information will be unified across the different STA's registries through the use of a powerful data integration tool called ACE

5. What is a ACE?
Virtual DB® is a centralized, high-performance, scalable solution for data transformation. It is the next generation data integration tool for companies that need to bring together their data sources in complex heterogenous environments. This is the tool taht will be used to link the 40 STAs' data sources.

6. Will the STAs need a new system?
NO, ACE works with the existing data sources in complex heterogeneous environments and brings these together to come up with a virtually unified database.

7. Who is CDVI?
Computer Data Vision, Inc. (CDVI) is a software developer systems integrator focusing on the financial services sector. CDVI has over twelve years of experience and high-level competency in core banking systems, Electronic Funds Transfer (EFT), secure financial transaction management, back-end, and data communications.

8. Is PASTRA establishing a separate legal entity for investors and brokers to deal with?
Not at all. On the contraty, the PASTRA has engaged Secure Trade to provide systems integration services so that participants in the stock market can directly and electronically deal with relevant transfer agent as they are unified through EDR.

9. What is PASTRA's goal in this project?
PASTRA's goals is to increase the volume of transactions and attract more investors by making their system more efficient and less risky as the movement of trades are made transparent.

10. Why does PASTRA say that the EDR will assist in the PSE's risk management efforts?
A key control principle that EDR follows is providing the investor a totally indepentdent means of verifying the proper and timely execution of his instructions. For example, an investor who has a buy order executed and requests name registration can only truly "close" the transaction only after he has actually received the physical certificate in his name. Under present conditions, that can take anywhere from 20 to 40 days.

With EDR, the investor can do an independent query electronically and see if his name and holdings appears in the TA's books at T+4.

11. Why does PASTRA say that this facility will lead to a totally scripless environment for the stock market?
The EDR is intended to encourage investors to surrentder and immobilize their certificates with the transfer agent directly. The investor will be albe to review his holdings as recorded in the books of the corporation electronically.

PASTRA believes the paradigm switch is similar to that which occurred as ATM's became prevalent and a preferred method of account maintenance. As people have grown comfortable to accessing their account as evidence of their deposti holdings has been substantially reduced.

At the same time, certain institutional investors, such as trust accounts managed by banks and insurance companies, have legal requirements to show direct and uncontested ownership of assets they have purchased. This applies to the financial instruments.

Philippine government securities today is totally scripless and enjoys the full participation of investors. Philippine government securities are directly registered in the nmae of the investor, thus giving the investor confidence in his/her holdings.

12. Now will EDR broaden participation in the stock market?
By going scripless, geography plays no factor. This is different from today's market wherein investors trading with name certificates need to be close due to the fact that transactions have to be cleared within T+4. Under such system, participation is largely limited to investors operating within a 30 km radius of the PSE.

At the same time, providing investors the ability to query their holdings which are registered in their name, should increase investors confidence.

13. Under the EDR, will a broker's guarantee on the security still be necessary?
PASTRA will waive the need for guarantees in transactions involving securities that were enrolled and registered into the EDR and whose corresponding physical certificate has been surrendered to and immobilized with the transfer agent.

This is possible because no reconciliation or verification is necessary. There is already a one-to-one correspondence between the details on the transfer book and the surrendering and immobilization of the physical vertificate at the transfer agent.


14. What are the benefits for the investor/stockholder?
• Investors will have an uncontested claim or proof of ownership over the securities they purchased.
• Investors will receive direct confirmation of stocks they purchased from STA.
• Investors will have a clear check and balance of transactions processed.

15. What are the benefits for the brokers?
Brokers no longer need to issue a broker's guarantee on the certificates. When a stockholder decides to sell his certificates, he surrenders them tot he STA who guarantees them
• Brokers will be able to verify, through a yes/no query, if a stockholder has sufficient numbers of shares to sell
• Less cost compared to the present

16. What are the benefits for the issuers?
Electronic registry can easily attract investors nationwide and globally
• Movement of stocks can be easily monitored
• Beneficial owners of stocks can be identified directly, thus allowing faster communication with investors
• More effiecient flow of information and financial benefits from company to stockholders

17. Is participation mandatory?
Participation is not mandatory. Investors can still opt to have their shares in street name or keep certificates.

18. Will it still be possible to keep physical certificates?
Physical certificates can still be issued upon the discretion of the stockholder

19. Can there still be lending and borrowing of stocks?
YES, as long at this function is still in operation. The business rules to be executed by the system will be determined by the SEC/PSE.
2004 Pastra. All rights reserved.
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