My comments on the GSeD letter to the investor

The images of the GSeD's letter and the attached news article furnished me by a GS investor is a helpful recounting of events. As early as July 2004, the dealers were already communicating the options available to their investors. As you can see with the dealer's attachment, RoSS was one of the options brought forward.

This letter was obviously sent out prior to my assumption of the post of Treasurer. However, the letter is consistent with the records that we have at the BTr evidencing the fact that we held several joint consultations with GSeDs with BSP officials in attendance. The option of RoSS being elected by the investor for 392 compliance was always discussed in detail during those consultations.

It can be concluded from these documents that there could have been no misunderstanding between the BTr and the BSP. The dealer's letter is proof that the dealer also had the same understanding of the compliance options available (not to mention the Inquirer's as well).

We were already implementing the migration of accounts from our dealers to RoSS (based on their own understanding of the BSP's concordance) until we were inhibited by the DoJ opinion last month. Otherwise, BTr would have already been enabled a Circ. 392 compliant situation.

We would have been able to do that on-time, on-budget with little to no increase is operating costs since we had already configured RoSS to handle the job.

As per the Inquirer article, the BSP was already aware of the cost impact on the retail investor and the BSP wanted RoSS to handle that difficult task. That was a non-issue for the Bureau since it already did retail investor accounting.

As anyone steeped in bank operations would know, consumer and retail based financial services require more capable systems that those that focus on corporate financial services. The same is true for RoSS.

I would have much preferred that rather than reinvent the wheel and create new expenses, the market would be much better off building on what we already have here at BTr and making it possible to deliver superb services for the retail investor.