Section 39Sec./Art. 39

SMI Capitalization and Organizational Requirements. - Any SMI established for the housing sector shall be a stock corporation and shall have a minimum initial paid-up capital of Two billion pesos (P2,000,000,000.00): Provided, That the total obligation of the SMI, including both actual and contingent obligations, shall not exceed fifteen (15) times its paid-up capital: Provided, further, That the actual obligations of the SMI shall not exceed ten (10) times its paid-up capital: Provided, furthermore, That the ratios indicated herein may be adjusted by the Commission with approval of the DOF and BSP upon a showing that the conditions of the secondary and primary markets and the financial viability of the SMI warrant such adjustment: Provided, Finally, That the investment of financial entities in the SMI shall be subjected to and be made to comply with rules and regulations of the appropriate regulatory agency.

Government financial institutions and government-owned or-controlled corporations, may collectively hold and own up to a maximum of thirty percent (30%) of the SMI's capital: Provided, That such investment does not conflict with their existing charters

A government financial institution may invest up to a maximum of ten percent (10%) of its total investible funds in housing-related assets or five percent (5%) in non-housing related assets: Provided, That such investment does not exceed five percent (5%) of the total amount of each ABS issue.

Within ten (10) years of its incorporation, the SMI shall offer and list at least twenty percent (20%) of its common shares in the stock exchange, which period shall be extendible only upon approval of the Commission in instances where the lace of financial viability of the SMI warrants such extension.