A Primer on Investing in and Owning Stocks

Buying or Selling of Shares

If you wish to buy or sell shares of stock, you may contact any licensed stockbroker operating in the Philippine Stock Exchange (  Among other fees, stockbrokers charge a standard fee for every buy or sell transaction, usually ranging from 0.75% to 1.5%.  An additional 1/2 of 1% stock transaction tax of the gross selling price is paid by the seller, based on the market value of the stock sold.  A transfer fee is also charged by a corporation or its stock transfer agent.

Under Philippine laws, foreigners are allowed to own up to 40% of FPHC’s total outstanding shares of stock.

Issuance of Stock Certificates

Buyers of shares who want their names to be recognized in the company’s stock and transfer books should specifically request their stockbrokers that stock certificates be issued under their names.  Buyers who do not do so will have ownership of their shares under “street” or “scripless form” under the name of the stockbroker.  In the absence of a proxy, the registered owner has voting rights to the shares of stock.

A stock certificate is the proof of owernship / right to ownership in a company.  Ownership of shares can be transferred once the corrpesponding stock certificate is endorsed or signed by the owner at the back thereof.  Stock certificates should be safeguarded properly.  They should not be endorsed at the back until there is a sale or transfer.

Replacement of Lost or Destroyed Stock Certificates

Should your stock certificates become lost, stolen, or destroyed, please immediately notify FPHC or its stock transfer agent in writing so that transfers may not be allowed to avoid any unscrupulous selling of the shares.  Pursuant to the Corporation Code and FPHC’s By-Laws, the registered owner should submit the following: (1) an Affidavit of Loss indicating, among others, the nature of the loss or destruction, the stock certificate number(s), and the number of shares involved; (2) an Affidavit of publication from the publisher evidencing that the loss was published in a newspaper of general circulation once a week for 3 consecutive weeks, (3) a surety bond equivalent to 150% of the market value of the shares, should you decide to have the replacement stock certificate issued within one year from the last publication date.  Otherwise, the replacement stock certificate shall be issued one year after the last publication date, and (4) transfer fees charged by FPHC’s stock transfer agent.

Direct Transfers

Direct Transfers (DTs) are stock transactions where a registered stockholder transfers his or her shares of stock to another party outside the PSE, usually from an “over-the-counter” transaction mutually agreed upon by the buyer and seller.

For FPHC or its stock transfer agent to register DTs, the parties should submit to the stock transfer agent the following: (1) duly-endorsed stock certificates; (2) a Deed of Sale or Assignment, (3) proof of payment of the capital gains tax, including a Certificate Authorizing Registration issued by the Bureau of Internal Revenue; (4) specimen signature cards of the new owner, (5) a copy of valid identification cards (if the new owner is an individual) or Articles of Incorporation, By-Laws, and List of authorized signatories (if the new owner is a corporation), and (6) transfer fees to be charged by FPHC’s stock transfer agent.

Alternatively, direct transfers may be coursed through PSE-licensed stockbrokers who can effect a “cross-sale” in the PSE trading floor. In such instance, the stockbroker arranges for the remittance of taxes.  In lieu of the capital gains tax, stockholders will be charged sales transation tax equivalent to 1/2 of 1% of the market value of the shares crossed.  In addition, brokers normally charge commission for DTs.

Transfer of Shares Due to Death of A Stockholder

Transfers of shares owned by deceased stockholders may be effected either judicially or extra-judicially, as follows:

  • Judicially – the surviving heirs should submit the following: (1) Order of Partition approved by a Philippine court, indicating the manner of division of the Estate among the surviving heirs; (2) stock certificates registered under the decedent’s name; (3) specimen signature cards of the new stockholders, (4) a copy of valid identification cards, and (5) transfer fees charged by FPHC’s stock transfer agent.
  • Extrajudicially – the surviving heirs should submit the following: (1) Deed of Extrajudicial Settlement; (2) certified true copy of the stockholder’s death certificate; (3) a certification from the BIR on the payment of, or exemption from the Estate Tax; (4) Affidavit of publication evidencing that the extrajudicial settlement involving the shares of stock was published in a newspaper of general circulation; (5) stock certificate(s) registerd under the decedent’s name; (6) transfer fees charged by FPHC’s stock transfer agent, and (7) a two year Heir’s Bond, should the heirs wish for the immediate transfer of shares to their name.  Otherwise, transfer will only be made two years from the submission of all requirements.

Upon submission of the aforementioned requirements, the heirs should also surrender any dividend check named under the deceased stockholder so that the same may be replaced in the same manner that the shares were partitioned.

Change of Mailing Address

Stockholders who have changed their address and wishes that their records with the compay or stock transfer agent be updated should send a signed letter request and a copy of two (2) valid identification cards.  Stockholders are encouraged to regularly update their addresses to ensure receipt of company notices or dividends.