SETTLEMENT
The PSE has its own clearing house (a commercial bank)
through which all transactions are settled. Brokers must comply with all requirements for the transfer of shares and must deliver the corresponding stock certificates and all requisite documents to the relevant clearing house
within four business days from the trade date of the relevant transaction. Settlement occurs on the fourth business day after the trade day. The clearing house is then required to deliver the stock certificates and documents to
the transfer agent of the relevant company in order to effect the transfer in the company's books and to deliver the new certificates back to the clearing house.
On October 3, 1994, the PSE employed a
new composite index, the Philippine Stock Exchange Composite Index, which included both A and B shares as well as large liquid and profitable stocks recently listed.
PHILIPPINE CENTRAL DEPOSITORY, INC.
The Philippine Central Depository, Inc. (PCD) was incorporated in March 31, 1995 to provide a mechanism for allowing book entry for transfers of ownership of both equity and debt issues/securities. Book entry transfers make trading in securities a lot more efficient and safe as this allows for the electronic transfer of ownership within minutes, replacing the tedious practice of settling trades with the physical handling of certificates and/or currency. The PCD is majority-owned by the Bankers Association of the Philippines and the PSE with each having a 31.6% stake in the company. Other PCD shareholders are: the Development Bank of the Philippines and the Financial Executives Association of the Philippines, each having a 10% stake, the Investment House Association of the Philippines with 6.8%, and the Social Security System and Citibank, each having a 5% stake.