May 30, 1958
CBP MEMORANDUM
TO : Authorized Security Dealers
In its Resolution No. 715 dated May 6, 1958, the Monetary Board decided to revise the general policy on switch transactions involving securities for the account of nonresidents, as follows:
That switch transactions in Philippine domestic securities including the export of securities from a nonresident to another nonresident are allowed only after the following conditions are satisfied:
(1) That the purchase of the original securities by the nonresident of any alien holder and the dollar remittance of the dividends earned have been authorized by the Central Bank;
(2) That the switch transaction is from stocks with larger earnings and higher remittable dividends to stocks with smaller earnings and lower remittable dividends or to stocks of highly speculative character, such as those of oil exploration companies; and
(3) That in no case, however, shall the investment remittances of the dividends in the new stocks as a result of switch transactions exceed the amount of dividends allowed to be remitted of the original stocks.
In view of this decision of the Monetary Board, effective May...
