Legal, Regulatory Framework for Asset-Backed Securities Sought

Article excerpt

President Joseph Estrada has ordered the goveernment agencies concern to develop a legal and regulatory framework which will accelerate the issuance and sale of assetbacked securities (ABS).

In an Executive Order issued over the weekend, the President instructed the Department of Finance, the Bureau of Internal Revenue, and the Securities and Exchange Commission, as well as the Housing and Urban Development Coordinating Council (HUDCC), to form top-level teams which will develop the administrative and regulatory framework in their respective departments for the development of a market for assetbacked securities, in consultation with the private sector .

Signed November 17, E.O. No. 318 takes effect immediately.

Under the EO, the DOF, in consultation with concerned agencies of government is mandated to review the draft bill that rationalizes legal, tax and regulatory impediments to the creation of asset-backed securities and their subsequent resale and trading.

The E.O. also provides that DOF and BIR shall review the current tax treatment of asset-backed securities and shall, if possible, issue revenue regulations or rulings to clarify or resolve tax issues which may affect the development of the asset-backed securities market.

The E.O. was proposed by the Financial Executives of the Philippines and endorsed by the Economic Mobilization Group (EMG) Committee composed of the Department of Finance, FINEX, Securities and Exchange Commission, Social Security System, Government Service Insurance System, Bangko Sentral ng Pilipinas and an EMG Consultant. …