The Securities Regulation Code: I. Non-Capital Markets

163
THE SECURITIES I. Non-Capital Markets
REGULATION CODE The places to go if you want to hedge or

mitigate the risks attached to holding
(RA 8799) capital assets
1. Commodity Market – The instruments

traded in this market are not present
assets like shares of stock,
commercial papers or bonds but
I future contracts calling for delivery of
OVERVIEW: an asset ; for this reason, a
THE FINANCIAL MARKETS commodity market is usually referred
to as a futures market. (eg,
agricultural products, metals and
A. Capital Markets financial instruments)
The places to go if you want to raise new Security – a futures contract (one
money which entitles the holder to buy or
sell a specific amount of the
1. Equity Capital – for the investor, the underlying commodity
stock market provides a variable represented by the contract in a
return prearranged, deliverable grade at
a. Stock Market – a specific date in the future at a
Security – eg, shares of specified price.
stock
2. Foreign Exchange Market – This
2. Debt Capital – for the lender, the market is an over-the-counter market
money or bond market provides a conducted by international banks and
fixed return does not have a central location
a. Money Market – for short term Security – a forward exchange

debts, ie, those normally contract
maturing within 1 year from
date of issuance – 3. Options Market – It enables an
investor to purchase an option giving
Security – commercial paper him the right to buy or sell a specific
(an unsecured IOU of a number of shares at a future date, at
company, issued on a a specific price. For this right, the
discount basis, promising to investor either pays or receives
pay the holder the full face money but (just like in a commodity
value thereof upon market) the money involved is only a
redemption) fraction of the market value of the
shares concerned.
b. Bond Market – for long term
debts, ie, those normally Security – call or put options
maturing after a year from date
of issuance
Security – junk bonds (high II

yield bonds having high OVERVIEW OF THE LAW
interest rates and are issued
by lower credit rated
companies or companies with
no credit rating)
A. State Policy
The State shall establish a socially

conscious, free market that regulates
itself, encourages the widest participation
of ownership in enterprises, enhances the
[Lorybeth_Baldrias.head] [Nayna_Malayang.deputy] [Dionne_Sanchez.acads] [Jam_Jacob.design]

[Bobbie_StaMaria.printing] [Miles Malaya.lectures]
[Japee_DeLeon.poli_law] [Ascheia_Yumul.rem_law] [Paul_Sorino/Judy_Ripol.civ_law] [Hya_Rafael/Mac_Macapagal.crim_law]
[Vivian_Tan/Justin_Mendoza.labor_law] [Miguel_DeJesus.legal_ethics] [Lianne_Gervasio.comm_law]
[Ces_Sicangco/Rowena_Romero.tax_law]
164
democratization of wealth, promotes the any entity or person under
development of the capital market, investigation;
protect investors, ensures full and fair 13. Suspend, or revoke the franchise or
disclosure about securities, minimizes if certificate of registration of
not totally eliminates insider trading and corporations, partnerships or
other fraudulent or manipulative devices associations;
and practices which create distortions in 14. Such other powers as may be
the free market. provided by law as well as those
which may be implied from, or which
are necessary or incidental.
B. Powers and Functions of the SEC
The Commission’s jurisdiction over all
The shall have, among others, the cases enumerated under Sec 5 of PD 902-
following powers and functions: A is hereby transferred to the Courts of
1. Have jurisdiction and supervision general jurisdiction or the appropriate
over all corporations, partnerships Regional Trial Court.
or associations who are the
grantees of primary franchises The Commission shall retain jurisdiction
and/or a license or permit issued by over pending cases involving intra-
the Government; corporate disputes submitted for final
2. Formulate policies and resolution which should be resolved within
recommendations on issues 1 year from the enactment of this Code.
concerning the securities market,
advise Congress and other The Commission shall retain jurisdiction
government agencies on all aspects over pending suspension of
of the securities market payments/rehabilitation cases filed as of
3. Approve, reject, suspend, revoke 30 June 2000 until finally disposed.
or require amendments to
registration statements, and
registration and licensing II. Definition of Terms
applications;
4. Regulate, investigate or supervise 1. Securities - are shares, participation
the activities of persons; or interests in a corporation or in a
5. Supervise, monitor, suspend or take commercial enterprise or profit-
over the activities of exchanges, making venture and evidenced by a
clearing agencies and other SROs; certificate, contract, instrument,
6. Impose sanctions for the violation of whether written or electronic in
laws, rules, regulations and orders; character. It includes:
7. Prepare, approve, amend or repeal
rules, regulations and orders; (a) Shares of stock, bonds,
8. Enlist the aid and support of and/or debentures, notes, evidences of
deputize any and all enforcement indebtedness, asset-backed
agencies of the Government, as well securities;
as any private institution, (b) Investment contracts, certificates
corporation, firm, association or of interest or participation in a
person; profit sharing agreement,
9. Issue cease and desist orders to certificates of deposit for a future
prevent fraud or injury; subscription;
10. Punish for contempt of the (c) Fractional undivided interests in
Commission, both direct and oil, gas or other mineral rights;
indirect; (d) Derivatives like option and
11. Compel the officers of any warrants;
registered corporation or association (e) Certificates of assignments,
to call meetings of stockholders or certificates of participation, trust
members; certificates, voting trust
12. Issue subpoena duces tecum and certificates or similar instruments;
summon witnesses to appear, (f) Proprietary or non proprietary
search and seizure of all documents, membership certificates
papers, files and records, tax incorporations; and
returns, and books of accounts of

165
(g) Other instruments as may in the 9. Promoter - a person who, acting
future be determined by the alone or with others, takes initiative in
Commission. founding and organizing the business
or enterprise of the issuer and
2. Issuer - the originator, maker, receives consideration therefor.
obligor, or creator of the security.
10. Registration statement - is the
3. Broker - a person engaged in the application for the registration of
business of buying and selling securities required to be filed with the
securities for the account of others. Commission.
4. Dealer - any person who buys and 11. Salesman - a natural person,
sells securities for his/her own employed as such or as an agent, by
account in the ordinary course of a dealer, issuer or broker to buy and
business. sell securities.
5. Associated person of a broker or 12. Underwriter - a person who

dealer - an employee thereof who, guarantees on a firm commitment
directly exercises control of and/or declared best effort basis the
supervisory authority, but does not distribution and sale of securities of
include a salesman, or an agent or a any kind by another company.
person whose functions are solely
clerical or ministerial.
C. Registration of Securities
6. Clearing Agency - any person who
acts as intermediary in making Securities shall not be sold or offered for
deliveries upon payment to effect sale or distribution within the Philippines,
settlement in securities transactions. without a registration statement duly filed
with and approved by the Commission.
7. Exchange - an organized
marketplace or facility that brings 1. Filing of Registration Statement
together buyers and sellers and
executes trades of securities and/or All securities shall be registered
commodities. through the filing by the issuer in the
main office of the Commission, of a
8. Insider – sworn registration statement. The
(a) the issuer; registration statement shall include
(b) a director or officer (or person any prospectus required or permitted
performing similar functions) of, to be delivered.
or a person controlling the
issuer; The information required for
(c) a person whose relationship or registration shall include, among
former relationship to the issuer others the effect of the securities
gives or gave him access to issue on ownership, on the mix of
material information about the ownership, especially foreign and local
issuer or the security that is not ownership.
generally available to the public;
(d) a government employee, or The registration statement shall be
director, or officer of an signed by
exchange, clearing agency  the issuer’s executive officer
and/or self-regulatory  principal operating officer
organization who has access to  principal financial officer
material information about an  comptroller
issuer or a security that is not  principal accounting officer
generally available to the public;  corporate secretary or
or  persons performing similar
(e) a person who learns such functions
information by a communication
from any of the foregoing Accompanied By a duly verified
insiders. resolution of the board of directors.

166
The written consent of the expert
named as having certified any part If a registration statement is on its
of the registration statement or any face incomplete or inaccurate in any
document used in connection material respect, the Commission
therewith shall also be filed. shall issue an order directing the
amendment of the registration
Where the registration statement statement. Upon compliance with
includes shares to be sold by selling such order, the amended registration
shareholders, a written certification statement shall become effective.
by such selling shareholders as to
the accuracy of any part of the An amendment filed prior to the
registration statement contributed effective date of the registration
to by such selling shareholders shall statement shall recommence the 45
also be filed. day period within which the
Commission shall act on a registration
statement.
2. Payment of Fee
An amendment filed after the
The issuer shall pay to the effective date of the registration
Commission a fee of not more than statement shall become effective only
1/10 of 1% of the maximum upon such date as determined by the
aggregate price at which such Commission.
securities are proposed to be
offered. The Commission shall If any change occurs in the facts set
prescribe by rule diminishing fees in forth in a registration statement, the
inverse proportion to the value of issuer shall file an amendment thereto
the aggregate price of the offering. setting forth the change.
3. Notice of Filing 6. Acceptance or Rejection by SEC
Notice of the filing shall be Within 45 days after the date of filing
immediately published by the issuer of the registration statement, or by
in 2 newspapers of general such later date to which the issuer
circulation in the Philippines, once a has consented, the Commission shall
week for 2 consecutive weeks, or in declare the registration statement
such other manner as the effective or rejected, unless the
Commission shall prescribe, reciting applicant is allowed to amend the
that: registration statement.
 a registration statement has a) Acceptance

been filed,
 the registration statement, as The Commission shall declare the
well as the papers attached registration statement to be
thereto are open to inspection, effective if it finds that the
 copies shall be furnished to registration statement together
interested parties at such with all the other papers and
reasonable charge as the documents attached thereto, is on
Commission may prescribe. its face complete and that the
requirements have been complied
with.
4. Withdrawal of Registration
Statement b) Rejection / Revocation
A registration statement may be The Commission may reject a

withdrawn by the issuer only with registration statement and refuse
the consent of the Commission. registration of the security, or
revoke the effectivity of a
registration statement and the
5. Amendments to Registration registration of the security
Statement

167
thereunder after due notice and
hearing if it finds that: 7. Oath of Issuer
 The issuer: Upon effectivity of the registration

o Has been judicially declared statement, the issuer shall state
insolvent; under oath in every prospectus that
o Has violated any of the all registration requirements have
provisions of this Code, the been met and that all information are
rules promulgated pursuant true and correct as represented by
thereto, or any order of the the issuer or the one making the
Commission in connection statement.
with the offering for which a
registration statement has Any untrue statement of fact or
been filed; omission to state a material fact
o Has been or is engaged or is required to be stated or necessary to
about to engage in make the statement therein not
fraudulent transactions; misleading shall constitute fraud.
o Has made any false or
misleading representation of
material facts in any D. Suspension of Offer and Sale
prospectus;
o Has failed to comply with  If the Commission deems it
any requirement that the necessary, it may issue an order
Commission may impose as suspending the offer and sale of the
a condition for registration securities pending any investigation.
 If, at any time, the Commission finds
 The registration statement is on that a registration statement contains
its face incomplete or inaccurate any false statement or omits to state
in any material respect or any fact required to be stated therein
includes any untrue statement of or necessary to make the statements
a material fact or omits to state therein not misleading, the
a material fact required to be Commission may conduct an
stated therein or necessary to examination, and, after due notice
make the statements therein not and hearing, issue an Order
misleading; or suspending the effectivity of the
 The issuer, any officer, director registration statement.
or controlling person of the  Failure of the issuer, underwriter, or
issuer, or person performing any other person to cooperate, or his
similar functions, or any obstruction or refusal to undergo an
underwriter has been convicted, examination, shall be a ground for the
by a competent judicial or issuance of a suspension order.
administrative body, upon plea  If, at any time, the information
of guilty, or otherwise, of an contained in the registration
offense involving moral turpitude statement filed is or has become
and/or fraud or is enjoined or misleading, incorrect, inadequate or
restrained by the Commission or incomplete in any material respect, or
other competent judicial or the sale or offering for sale of the
administrative body for violations security registered thereunder may
of securities, commodities, and work or tend to work a fraud, the
other related laws. Commission may require from the
 If any issuer shall refuse to issuer such further information
permit an examination to be necessary to enable the Commission
made by the Commission, its to ascertain whether the registration
refusal shall be ground for the of such security should be revoked.
refusal or revocation of the The Commission may also suspend
registration of its securities. the right to sell and offer for sale such
security pending further investigation.
 The refusal to furnish information
required by the Commission may be a
ground for the issuance of an order of
suspension.

168
not for the purpose of avoiding
The order shall be deemed confidential, the provisions of this Code, to
and shall not be published. liquidate a bona fide debt, a
security pledged in good faith as
Upon the issuance of the suspension security for such debt.
order, no further offer or sale of such (c) An isolated transaction in which
security shall be made until the same is the sale or offer for sale,
lifted or set aside by the Commission. subscription or delivery is not
Otherwise, such sale shall be void. being made in the course of
repeated and successive
Notice of issuance of such order shall be transactions by the owner or his
given to the issuer and every dealer and representative and such owner or
broker who shall have notified the representative not being the
Commission of an intention to sell such underwriter of such security.
security. (d) The distribution by a corporation
to its stockholders or other
security holders as a stock
E. Exempt Securities and Transactions dividend or other distribution out
of surplus.
1. Exempt Securities (e) The sale of capital stock of a
corporation to its own
(a) Any security issued or stockholders exclusively, where
guaranteed by the Government no commission or other
of the Philippines, or by any remuneration is paid or given
political subdivision or agency directly or indirectly.
thereof, or by any person acting (f) The issuance of bonds or notes
as an instrumentality of said secured by mortgage upon real
Government. estate or tangible personal
(b) Any security issued or property, where the entire
guaranteed by the government mortgage together with all the
of any country with which the bonds or notes secured thereby
Philippines maintains diplomatic are sold to a single purchaser at a
relations, or by any state, single sale.
province or political subdivision (g) The issue and delivery of any
thereof on the basis of security in exchange for any other
reciprocity. security of the same issuer
(c) Certificates issued by a receiver pursuant to a right of conversion:
or by a trustee in bankruptcy Provided, That the security
duly approved by the proper surrendered has been registered
adjudicatory body. under this Code or was exempt,
(d) Any security or its derivatives and that the security delivered in
the sale or transfer of which is exchange, if sold at the
under the supervision and conversion price, would at the
regulation of the Office of the time of such conversion fall within
Insurance Commission, Housing the class of securities entitled to
and Land Use Regulatory Board, registration under this Code.
or the Bureau of Internal Upon such conversion the par
Revenue. value of the security surrendered
(e) Any security issued by a bank in such exchange shall be deemed
except its own shares of stock. the price at which the securities
issued and delivered in such
2. Exempt Transactions – exchange are sold.
(h) Broker’s transactions, executed
(a) At any judicial sale, or sale by upon customer’s orders, on any
an executor, administrator, registered Exchange or other
guardian or receiver or trustee trading market.
in insolvency or bankruptcy. (i) Subscriptions for shares of the
(b) By or for the account of a capital stock of a corporation prior
pledge holder, or mortgagee or to incorporation or in pursuance
similar lien holder selling in the of an increase in its authorized
ordinary course of business and capital stock, when no expense is

169
incurred, or no commission, 3. Procedure to Qualify for
compensation or remuneration Exemption
is paid or given, and only when
the purpose for soliciting, giving Any person applying for an exemption
or taking of such subscriptions shall file with the Commission a notice
is to comply with the identifying the exemption relied upon
requirements of such law as to on such form and at such time as the
the percentage of the capital Commission by rule may prescribe
stock which should be and with such notice shall pay to the
subscribed before it can be Commission a fee equivalent to 1/10
registered and duly of 1% of the maximum aggregate
incorporated, or its authorized price or issued value of the securities.
capital increased.
(j) The exchange of securities by
the issuer with its existing
security holders exclusively, III. Tender Offer and
where no commission or other Proxy Solicitation
remuneration is paid.
(k) The sale of securities by an 1. Tender Offers
issuer to fewer than 20 persons
in the Philippines during any Parties Required to make
twelve-month period. Tender Offer
(l) The sale of securities to any of
the following qualified buyers: (a) Any person or group of
 Bank; persons acting in concert who
 Registered investment intends to acquire at least
house; 15% of any class of any
 Insurance company; equity security of a listed
 Pension fund or retirement corporation or of any class of
plan maintained by the any equity security of a
Government or any political corporation with assets of at
subdivision or managed by least P50,000,000 and having
a bank or other persons 200 or more stockholders
authorized by the Bangko with at least 100 shares each
Sentral to engage in trust or
functions; (b) who intends to acquire at
 Investment company; or least 30% of such equity over
 Such other person as the a period of 12 months shall
Commission determine as make a tender offer to
qualified buyers, on the stockholders by filing with the
basis of such factors as Commission a declaration to
financial sophistication, net that effect; and furnish the
worth, knowledge, and issuer a statement containing
experience in financial and such of the information as the
business matters, or Commission may prescribe.
amount of assets under
management. Withdrawal of tender Offer
Securities deposited pursuant to a
The Commission may exempt other tender offer or request or
transactions, if it finds that the invitation for tenders may be
requirement of registration is not withdrawn by or on behalf of the
necessary in the public interest or depositor at any time throughout
for the protection of the investors the period that the tender offer
such as by reason of the small remains open and if the securities
amount involved or the limited deposited have not been
character of the public offering. previously accepted for payment,
and at any time after 60 days
from the date of the original
tender offer or request or
invitation, except as the

170
Commission may otherwise without the express written
prescribe. authorization of such customer.
Securities offered exceed A broker or dealer who holds or

required quantity acquires the proxy for at least 10% or
Where the securities offered such percentage as the Commission
exceed that which a person or may prescribe of the outstanding
group of persons is bound or share of the issuer, shall submit a
willing to take up and pay for, report identifying the beneficial owner
the securities that are subject of within 10 days after such acquisition,
the tender offer shall be taken for its own account or customer, to
up as nearly as may be pro rata, the issuer of the security, to the
disregarding fractions, according Exchange where the security is traded
to the number of securities and to the Commission.
deposited by each depositor.
The provisions of this subsection 3. Fees for Tender Offers and Certain
shall also apply to securities Proxy Solicitations
deposited within 10 days after At the time of filing with the
notice of an increase in the Commission of any statement
consideration offered to security required for any tender offer or for
holders is first published or sent proxy or consent solicitation, the
or given to security holders. Commission may require that the
person making such filing pay a fee of
Variations of Tender Offer not more than 1/10 of 1% of:
Where any person varies the  The proposed aggregate purchase
terms of a tender offer or price in the case of a transaction
request or invitation for tenders under Sections 20 or 72.2;
before the expiration thereof by  The proposed payment in cash,
increasing the consideration and the value of any securities or
offered to holders of such property to be transferred in the
securities, such person shall pay acquisition, merger or
the increased consideration to consolidation, or the cash and
each security holder whose value of any securities proposed
securities are taken up and paid to be received upon the sale or
for whether or not such disposition of such assets in the
securities have been taken up case of a solicitation under
by such person before the Section 20.
variation of the tender offer or
request or invitation.
2. Proxy Solicitations F. Regulation of Transactions of

Proxies must be Directors / Officers / Principal
 in writing Stockholders
 signed by the stockholder or
his duly authorized  Every person who is directly or
representative and indirectly the beneficial owner of more
 filed before the scheduled than 10% of any class of any equity
meeting with the corporate security or
secretary.  who is a director or an officer of the
issuer of such security,
Unless otherwise provided in the
proxy, it shall be valid only for the shall file, at the time either such
meeting for which it is intended. No requirement is first satisfied or within ten
proxy shall be valid and effective for days after he becomes such a beneficial
a period longer than 5 years at one owner, director, or officer, a statement
time. with the Commission and, if such security
is listed for trading on an Exchange, also
No broker or dealer shall give any with the Exchange, of the amount of all
proxy, consent or authorization to a equity securities of such issuer of which
person other than the customer, he is the beneficial owner, and within ten

171
(10) days after the close of each But no person shall be deemed to have
calendar month thereafter, if there has violated this subsection if he proves that
been a change in such ownership during notwithstanding the exercise of good faith
such month, shall also file a statement he was unable to make such delivery or
indicating his ownership at the close of deposit within such time, or that to do so
the calendar month and such changes as would cause undue inconvenience or
have occurred during such calendar expense.
month.
The provisions shall not apply to any
For the purpose of preventing the unfair purchase and/or sale of an equity security
use of information which may have been
obtained by such beneficial owner,  not then or thereafter held by him
director, or officer by reason of his in an investment account,
relationship to the issuer  by a dealer in the ordinary course
of his business and incident to the
 any profit realized by him from establishment or maintenance by
any purchase and sale, or any him of a primary or secondary
sale and purchase, of any equity market, otherwise than on an
security of such issuer within Exchange, for such security.
any period of less than six (6)
months,
o unless such security was Manipulation of
acquired in good faith in Security Prices
connection with a debt
previously contracted, It shall be unlawful for any person
 shall inure to and be acting for himself or through a dealer
recoverable by the issuer, or broker, directly or indirectly:
irrespective of any intention of
holding the security purchased (a) To create a false or misleading
or of not repurchasing the appearance of active trading in
security sold for a period any listed security traded in an
exceeding 6 months. Exchange or any other trading
market:
Suit to recover such profit may be
instituted before the RTC by the issuer,  By effecting any transaction
or by the owner of any security of the in such security which involves
issuer in the name and in behalf of the no change in the beneficial
issuer if the issuer shall fail or refuse to ownership thereof;
bring such suit within 60 days after  By entering an order or
request or shall fail diligently to orders for the purchase or sale
prosecute the same thereafter. of such security with the
No such suit shall be brought more knowledge that a
than t2 years after the date such simultaneous order or orders
profit was realized. of substantially the same size,
time and price, for the sale or
It shall be unlawful for any beneficial purchase of any such security,
owner, director, or officer to sell any has or will be entered by or for
equity security of such issuer if the the same or different parties;
person selling: or
 By performing similar act
(a) Does not own the security sold; where there is no change in
or beneficial ownership.
(b) If owning the security, does not
deliver it against such sale (b) To effect, alone or with others, a
within 20 days thereafter, or series of transactions in securities
does not within 5 days after that:
such sale deposit it in the mails
or other usual channels of  Raises their price to induce
transportation; the purchase of a security;

172
 Depresses their price to generally available to the public,
induce the sale of a security; unless:
or
 Creates active trading to (a) The insider proves that the
induce such a purchase or information was not gained from
sale through manipulative such relationship; or
devices such as marking the (b) If the other party selling to or
close, painting the tape, buying from the insider (or his
squeezing the float, hype agent) is identified, the insider
and dump, boiler room proves:
operations and such other  that he disclosed the
similar devices. information to the other party,
or
(c) To circulate or disseminate  that he had reason to believe
information that the price of any that the other party otherwise
security listed in an Exchange is also in possession of the
will or is likely to rise or fall information.
because of manipulative market
operations of any one or more A purchase or sale of a security of the
persons conducted for the issuer shall be presumed to have been
purpose of raising or depressing effected while in possession of
the price of the security for the material non-public information if
purpose of inducing the transacted after such information
purchase or sale of such came into existence but prior to
security. dissemination of such information to
the public and the lapse of a
(d) To make false or misleading reasonable time for the market to
statement with respect to any absorb such information
material fact, which he knew or
had reasonable ground to This presumption shall be rebutted
believe was so false or upon a showing by the purchaser or
misleading, for the purpose of seller that he was not aware of the
inducing the purchase or sale of material non-public information at the
any security listed or traded in time of the purchase or sale.
an Exchange.
(e) To effect any series of Material non-public information:

transactions for the purchase It has not been generally disclosed to
and/or sale of any security the public and would likely affect the
traded in an Exchange for the market price of the security after
purpose of pegging, fixing or being disseminated to the public and
stabilizing the price of such the lapse of a reasonable time for the
security, unless otherwise market to absorb the information; or
allowed by this Code or by rules would be considered by a reasonable
of the Commission. person important under the
circumstances in determining his
course of action whether to buy, sell
1. Insider Trading or hold a security.
Parties covered : It shall be unlawful for any insider to

 Insider communicate material non-public
 insider’s spouse or relatives by information about the issuer or the
affinity or consanguinity within security to any person who, by virtue
the second degree, legitimate or of the communication, becomes an
common-law, insider, where the insider
communicating the information knows
It shall be unlawful for an insider to or has reason to believe that such
sell or buy a security of the issuer, person will likely buy or sell a security
while in possession of material of the issuer while in possession of
information with respect to the such information.
issuer or the security that is not

173
o No registered broker or dealer
shall employ any salesman or
any associated person, and no
issuer shall employ any
salesman, who is not registered
Insider Trading in Relation to as such with the Commission.
Tender Offers
o Nicolas vs CA (1998):
a.) It shall be unlawful where a
tender offer has commenced or The futility of petitioner's action
is about to commence for: became more pronounced by
 Any person (other than the the fact that he traded
tender offeror) who is in securities for the account of
possession of material non- others without the necessary
public information relating to license from the SEC. Clearly,
such tender offer, to buy or such omission was in violation
sell the securities of the of Section 19 of the Revised
issuer that are sought or to Securities Act.
be sought by such tender
offer if such person knows or The purpose of the statute
has reason to believe that requiring the registration of
o the information is brokers selling securities and
non-public and the filing of data regarding
o has been acquired securities which they propose to
directly or indirectly sell, is to protect the public and
from the tender strengthen the securities
offeror, those acting mechanism.
on its behalf, the
issuer of the American jurisprudence
securities, or any emphasizes the principle that:
insider of such "an unlicensed person may not
issuer; and recover compensation for
 Any tender offeror, those services as a broker where a
acting on its behalf, the statute or ordinance requiring a
issuer of the securities, and license is applicable and such
any insider to communicate statute or ordinance is of a
material non-public regulatory nature, was enacted
information relating to the in the exercise of the police
tender offer to any other power for the purpose of
person. protecting the public, requires a
license as evidence of
qualification and fitness, and
K. Regulation of Market Professionals expressly precludes an
and Other Entities unlicensed person from
recovering compensation by
suit, or at least manifests an
1. Registration of Brokers, intent to prohibit and render
Dealers, Salesmen and unlawful the transaction of
Associated Persons business by an unlicensed
person."
General Rule :
o No person shall engage in the We see no reason not to apply
business of buying or selling the same rule in our
securities in the Philippines as jurisdiction. Stock market
a broker or dealer, or act as a trading, a technical and highly
salesman, or an associated specialized institution in the
person of any broker or dealer Philippines, must be entrusted
unless registered as such with to individuals with proven
the Commission. integrity, competence and
knowledge, who have due

174
regard to the requirements of (b) In the case of a broker or
the law. dealer, the applicant satisfy
a minimum net capital and
provide a bond or other
security as the Commission
may prescribe
(c) If located outside of the
Exception: Philippines, the applicant
The Commission may files a written consent to
conditionally or service of process.
unconditionally exempt any
broker, dealer, salesman,
associated person of any 3. SEC Action
broker or dealer, or any class
of the foregoing, from Within 30 days after the filing of
registration as it deems any application, the Commission
consistent with the public shall by order:
interest and the protection of
investors. (a) Grant registration if it
determines that the
requirements of this
Procedure: Section and the
qualifications for
o A broker or dealer may registration have been
apply for registration by filing satisfied; or
with the Commission a written (b) Deny said registration.
application.
o Registration of a salesman The names and addresses of all
or of an associated person persons approved for registration
of a registered broker or and all orders of the Commission
dealer may be made upon with respect thereto shall be
written application filed with recorded in a Register of
the Commission by such Securities Market Professionals
salesman or associated kept in the office of the
person. A salesman shall not Commission which shall be open
include any employee of an to public inspection.
issuer whose compensation is
not determined directly or
indirectly on sales of 4. Continuing Requirements
securities of the issuer.
o Every person registered shall
file with the Commission
2. Qualifications of Market information necessary to keep
Professionals the application for registration
current and accurate,.
The Commission shall promulgate o Every person registered shall
rules and regulations prescribing pay to the Commission an
the qualifications for registration annual fee. Upon notice by the
of each category of applicant, Commission that such annual
which shall, among other things, fee has not been paid as
require as a condition for required, the registration of
registration that: such person shall be suspended
until payment has been made.
(a) If a natural person, the
applicant satisfactorily
pass a written 5. Termination of Registration
examination as to his
proficiency and The registration of a salesman or
knowledge in the area of associated person shall be
activity for which automatically terminated upon the
registration cessation of his affiliation with said

175
registered broker or dealer, or (e) Is enjoined or restrained by a
with an issuer in the case of a competent judicial or
salesman employed, appointed or administrative body from
authorized by such issuer. engaging in securities,
commodities, banking, real
The registered broker or dealer, or estate or insurance activities
issuer, as the case may be, shall or from willfully violating laws
file with the Commission a notice governing such activities;
of separation of such salesman or (f) Is subject to an order of a
associated person. competent judicial or
administrative body refusing,
revoking or suspending any
6. Revocation, Refusal or registration, license or other
Suspension of Registration of permit under this Code, the
Brokers, Dealers, Salesmen rules and regulations
and Associated Persons promulgated thereunder, any
other law administered by the
If, after due notice and hearing, Commission;
the Commission determines the (g) Is subject to an order of a self-
applicant or registrant: regulatory organization
suspending or expelling him
(a) Has willfully violated any from membership or
provision of this Code, any participation
rule, regulation or order (h) Has been found to have willfully
made hereunder, or any violated any provisions of
other law administered by securities, commodities,
the Commission, or in the banking, real estate or
case of a registered broker, insurance laws, or has
dealer or associated person willfully aided, abetted,
has failed to supervise, with counseled, commanded,
a view to preventing such induced or procured such
violation, another person violation; or
who commits such violation; (i) Has been judicially declared
(b) Has willfully made or caused insolvent.
to be made a materially
false or misleading 29.4. It shall be sufficient cause for
statement in any application refusal, revocation or suspension of a
for registration or report broker's or dealer’s registration, if any
filed with the Commission or associated person thereof or any juridical
a self-regulatory entity controlled by such associated
organization, or has willfully person has committed any act or omission
omitted to state any or is subject to any disability enumerated
material fact that is earlier.
required to be stated
therein;
(c) Has failed to satisfy the L. Regulation of Exchanges
qualifications or
requirements for 1. Nature of Stock Exchanges
registration;
(d) Has been convicted of an Sec Opinion #11 (2003)
offense involving moral
turpitude, fraud, It is important to stress that the
embezzlement, Securities Regulation Code (SRC)
counterfeiting, theft, estafa, treats exchanges as a special specie
misappropriation, forgery, of corporation and subjects them to
bribery, false oath, or rules not otherwise applicable to
perjury, or of a violation of regular corporations.
securities, commodities,
banking, real estate or The stock exchange performs a
insurance laws; function vital to the national economy,
a function vested with public interest.

176
It is said that the economy moves (a) An undertaking to comply and
on the basis of the rise and fall of enforce compliance by its
the stocks traded and thus, the members with the provisions of
integrity of the exchange overseeing this Code, its implementing
these transactions can never be rules or regulations and the
over emphasized. It is for this rules of the Exchange;
reason that the SRC provides for (b) The organizational charts of the
stricter rules on exchange Exchange, rules of procedure,
regulation. The SRC devotes a whole and a list of its officers and
chapter on exchanges and other members;
securities trading markets, and it is (c) Copies of the rules of the
replete with provisions designed to Exchange; and
professionalize the exchange, (d) An undertaking that in the event
encourage greater public a member firm becomes
participation, ensure increased insolvent or when the Exchange
transparency, greater responsibility shall have found that the
and improve corporate governance. financial condition of its
These provisions are not found in member firm has so
the Corporation Code and are meant deteriorated that it cannot
as additional legal requirements readily meet the demands of its
applicable only to exchanges. customers for the delivery of
securities and/or payment of
It is thus incorrect to argue that the sales proceeds, the Exchange
provisions of the Corporation Code shall take over the operation of
alone govern the operation of the insolvent member firm and
exchanges. While the Corporation immediately proceed to settle
Code applies to corporations in the member firm’s liabilities to
general, the SRC is a special law its customers.
that primarily governs the regulation
of exchanges. As between a specific Registration of an Exchange shall be
statute and a general statute, the granted upon compliance with the
former must prevail since it evinces following provisions:
the legislative intent more clearly
than a general statute does. (a) That the applicant is organized as
a stock corporation;
Thus the SEC has the power of (b) That the applicant is engaged
supervision over exchanges. solely in the business of
Supervision entails overseeing or operating an exchange:
the power or authority to see that Provided, however, That the
subordinate subject performs its Commission may exempting an
duties. If the latter fails or neglects Exchange organized as a stock
to fulfill them the former may take corporation and owned and
such action or step as prescribed by controlled by another juridical
law to make them perform its person from this restriction;
duties. In this specific instance, the (c) Where the Exchange is organized
SEC can even take over the as a stock corporation, that no
management of the exchange as person may beneficially own or
authorized by the SRC. control, directly or indirectly,
more than 5% of the voting
rights of the Exchange and no
2. Registration Procedure industry or business group may
beneficially own or control more
Any Exchange may be registered as than 20% of the voting rights of
such with the Commission by filing the Exchange: Provided,
an application for registration in however, That the Commission
such form and containing such may adopt rules, regulations or
information and supporting issue an order, upon
documents as the Commission by application, exempting an
rule shall prescribe, including the applicant from this prohibition
following: where it finds that such
ownership or control will not

177
negatively impact on the rule, regulation, or order upon
exchange’s ability to application, permit the
effectively operate in the exchange organized as a stock
public interest; corporation to use a different
(d) The expulsion, suspension, or governance structure:
disciplining of a member and
persons associated with a Provided, further, That the
member for conduct or Commission is satisfied that the
proceeding inconsistent with Exchange is acting in the public
just and equitable principles interest and is able to
of fair trade, and for violations effectively operate as a self-
of provisions of this Code or regulatory organization under
the rules of the Exchange; this Code.
(e) A fair procedure for the
disciplining of members and (i) The president and other
persons associated with management of the Exchange
members, the denial of to consist only of persons who
membership to any person are not members and are not
seeking to be a member, the associated in any capacity,
barring of any person from directly or indirectly with any
association with a member, broker or dealer or member or
and the prohibition or listed company of the
limitation of any person from Exchange: Provided, That the
access to services offered by Exchange may only appoint,
the Exchange; and a person may only serve,
(f) That the brokers in the board of as an officer of the exchange if
the Exchange shall comprise such person has not been a
of not more than 49% of such member or affiliated with any
board and shall broker, dealer, or member of
proportionately represent the the Exchange for a period of at
Exchange membership in least 2 years prior to such
terms of volume/value of appointment;
trade and paid up capital, and (j) The transparency of transactions
that any natural person on the Exchange;
associated with a juridical (k) The equitable allocation of
entity that is a member shall reasonable dues, fees, and
himself be deemed to be a other charges among members
member for this purpose; and issuers and other persons
(g) For the board of the Exchange using any facility or system
to include in its composition which the Exchange operates or
(h) (i) the president of the controls;
Exchange, and (l) Prevention of fraudulent and
(ii) no less than 51% of the manipulative acts and practices,
remaining members of the promotion of just and equitable
board to be comprised of 3 principles of trade, and, in
independent directors and general, protection of investors
persons who represent the and the public interest; and
interests of issuers, investors, (m) The transparent, prompt and
and other market participants, accurate clearance and
who are not associated with settlement of transactions
any broker or dealer or effected on the Exchange.
member of the Exchange for a
period of 2 years prior to
his/her appointment. 3. Segregation and Limitation of
Functions of Members, Brokers
No officer or employee of a and Dealers
member, its subsidiaries or
affiliates or related interests It shall be unlawful for any member-
shall become an independent broker of an Exchange to effect any
director: Provided, however, transaction on such Exchange for:
That the Commission may by

178
 its own account,

 the account of an associated
person, or
 an account with respect to IV. Independent
which it or an associated person Directors
thereof exercises investment
discretion Any corporation with
Provided, however, That this section  a class of equity securities listed for
shall not make unlawful – trading on an Exchange or
 with assets in excess of
(a) Any transaction by a member- P50,000,000.00 and having 200 or
broker acting in the capacity more holders, at least of 200 of which
of a market maker; are holding at least 100 shares of a
(b) Any transaction reasonably class of its equity securities or which
necessary to carry on an odd- has sold a class of equity securities to
lot transactions; the public pursuant to an effective
(c) Any transaction to offset a registration statement
transaction made in error;
and Shall have at least 2 independent
(d) Any other transaction of a directors or such independent directors
similar nature as may be shall constitute at least 20% of the
defined by the Commission. members of such board, whichever is the
lesser.
Sec Opinion #11 (2003)
The above-quoted Sec. 33.2. of the SRC An “independent director” shall mean a
is not found in the old Revised Securities person other than an officer or employee
Act, nor in the Corporation Code. Items of the corporation, its parent or
(c), (f) and (g) thereof are all intended subsidiaries, or any other individual
to encourage greater public having a relationship with the corporation,
participation, ensure increased which would interfere with the exercise of
transparency, greater responsibility and independent judgment in carrying out the
improve corporate governance. responsibilities of a director.
Subsection (c) mandates that the

ownership of the stocks of the exchange M. Self-Regulatory Organizations
be broadened and democratized,
thereby ensuring greater public 1. Scope / Definition
participation.
The Commission shall have the power
On the other hand, Subsections (f) and to register as a self-regulatory
(g) mandate a board composition where organization organizations whose
no more than 49% of the seats shall be operations are related to or connected
occupied by brokers, and no less than with the securities market such as but
51% to be comprised of (3) independent not limited to
directors and persons representing other
sectors of the market. With respect to  associations of brokers and
independent directors, their election in dealers,
the Board is intended to ensure that the  transfer agents,
Board will faithfully discharge its  custodians,
fiduciary responsibilities to its  fiscal and paying agents,
stockholders.  computer services,
 news disseminating services,
These provisions aim for a more  proxy solicitors,
representative, democratic, independent  statistical agencies,
Board of Directors that is autonomous  securities rating agencies, and
from the control of any sector of the  securities information processors
market.
Which are engaged in the business of:

179
(a) Collecting, processing, or the interests of issuers
preparing for distribution or and public investors and
publication, or assisting, are not associated with
participating in, or coordinating any broker or dealer or
the distribution or publication member of the
of, information with respect to association; that the
transactions in or quotations for president and other
any security; or management of the
(b) Distributing or publishing on a association not be a
current and continuing basis, member or associated
information with respect to such with any broker, dealer or
transactions or quotations. member of the
association;
 For the equitable
2. Registration allocation of reasonable
dues, fees, and other
An association of brokers and charges among members
dealers may be registered as a and issuers and other
securities association by filing with persons using any facility
the Commission an application for or system which the
registration. association operates or
controls;
Such association shall not be  For the prevention of
registered unless the Commission fraudulent and
determines that: manipulative acts and
practices, the promotion
(a) The association is so organized of just and equitable
and has the capacity to be able principles of trade, and
to carry out the purposes of this the protection of investors
Code and to comply with, and to and the public interest;
enforce compliance by its  That its members be
members with the provisions of appropriately disciplined
this Code. for violation of any
(b) The rules of the association, provision of this Code;
notwithstanding anything in the  That a fair procedure for
Corporation Code to the the disciplining of
contrary, provide that: members, the denial of
membership to any person
 Any registered broker seeking membership
or dealer may become a therein, the barring of any
member of the person from becoming
association; associated with a member
 There exist a fair thereof, and the
representation of its prohibition or limitation by
members to serve on the association of any
the Board of Directors person with respect to
and in the administration access to services offered
of its affairs, and that by the association or a
any natural person member thereof.
associated with a
juridical entity that is a 3. Denial of Membership /
member shall himself be Employment
deemed to be a member
for this purpose; (a) A registered securities association
 The Board of Directors shall deny membership to any
of the association person who is not a registered
includes in its broker or dealer.
composition: (a) The (b) A registered securities association
president of the may deny membership to, or
association and (b) condition the membership of, a
Persons who represent

180
registered broker or dealer if For the purpose of preventing the
such broker or dealer: excessive use of credit for the
 Does not meet the purchase or carrying of securities, the
standards of financial Commission, shall prescribe rules and
responsibility, regulations with respect to the
operational capability, amount of credit that may be
training, experience, extended on any security.
or competence that
are prescribed by the For the extension of credit, such rules
rules of the and regulations shall be based upon
association; or the following standard:
 (ii) Has engaged, and
there is a reasonable An amount not greater than
likelihood it will again whichever is the higher of –
engage, in acts or
practices inconsistent (a) 65% of the current market price
with just and equitable of the security; or
principles of fair trade. (b) 100%)of the lowest market price
(c) A registered securities of the security during the
association may deny preceding 36 calendar months,
membership to a registered but not more than 75% of the
broker or dealer not engaged current market price.
in a type of business in which
the rules of the association
require members to be 2. Prohibited Credit Arrangements
engaged: Provided, however,
That no registered securities No member of an Exchange or broker
association may deny or dealer shall, directly or indirectly,
membership to a registered extend or maintain credit or arrange
broker or dealer by reason of for the extension or maintenance of
the amount of business done credit to or for any customer:
by the broker or dealer.
(d) A registered securities (a) On any security unless such
association may bar a credit is extended and
salesman or person maintained in accordance with
associated with a broker or the rules and regulations which
dealer from being employed the Commission shall prescribe;
by a member or set conditions (b) Without collateral or on any
for the employment of a collateral other than securities,
salesman or associated if such except
person:  to maintain a credit
 Does not meet the initially extended in
standards of training, conformity with the rules
experience, or and regulations of the
competence that are Commission; and
prescribed by the rules  in cases where the
of the association; or extension or maintenance
 Has engaged, and of credit is not for the
there is a reasonable purpose of purchasing or
likelihood he will again carrying securities or of
engage, in acts or evading or circumventing
practices inconsistent the provisions of par (a) of
with just and equitable this subsection.
principles of fair trade.
3. Restrictions on Borrowings by
N. Margin Trading Members, Brokers, and Dealers
1. Margin Requirements It shall be unlawful for any registered

broker or dealer, or member of an
Exchange, directly or indirectly:

181
next trading day but not beyond 10
 To permit in the ordinary course trading days following the last day for
of business his aggregate the customer to pay such purchase
indebtedness including price, unless such sale cannot be
customers’ credit balances, to effected within said period for
exceed such percentage of the justifiable reasons.
net capital (exclusive of fixed
assets and value of Exchange The sale shall be without prejudice to
membership) employed in the the right of the broker or dealer to
business, but not exceeding in recover any deficiency from the
any case 2,000%, as the customer.
Commission may prescribe.
 To pledge, mortgage, or
otherwise encumber any O. Administrative Sanctions and
security carried for the account Settlement Offers
of any customer under
circumstances: 1. Administrative Sanctions
o That will permit the
commingling of his If, after due notice and hearing, the
securities, without his Commission finds that:
written consent, with the
securities of any customer; (a) There is a violation of this Code,
o That will permit its rules, or its orders;
such securities to be (b) Any registered broker or dealer,
commingled with the associated person thereof has
securities of any person failed reasonably to supervise
other than a bona fide another person who commits
customer; or any such violation;
o That will permit (c) Any registrant or other person
such securities to be has, in a registration statement
pledged, mortgaged or or in other reports, applications,
encumbered, or subjected accounts, records or documents
to any lien or claim of the made any untrue statement of
pledgee, for a sum in a material fact, or omitted to
excess of the aggregate state any material fact required
indebtedness of such to be stated therein or
customers in respect of necessary to make the
such securities. statements therein not
 To lend or arrange for the misleading;
lending of any security carried (d) or, in the case of an underwriter,
for the account of any customer has failed to conduct an inquiry
without the written consent of with reasonable diligence to
such customer. insure that a registration
statement is accurate and
complete in all material
4. Enforcement of Margin respects; or
Requirements and Restrictions (e) Any person has refused to permit
on Borrowing any lawful examinations into its
affairs,
To prevent indirect violations of the
margin requirements, the broker or The imposition of administrative
dealer shall require the customer in sanctions shall be without prejudice to
non-margin transactions to pay the the filing of criminal charges.
price of the security within such
period as the Commission may
prescribe, which shall in no case 2. Settlement Offers
exceed the prescribed settlement
date. At any time, during an investigation
or proceeding under this Code, parties
Otherwise, the broker shall sell the being investigated and/or charged
security purchased starting on the

182
may propose in writing an offer of (c) Every person who is named in the
settlement with the Commission. registration statement as being
or about to become a director
The Commission may consider the or a partner;
offer based on timing, the nature of (d) Every auditor or auditing firm
the investigation or proceeding, and named as having certified any
the public interest. financial statements used in
connection with the registration
The Commission may only agree to statement or prospectus.
a settlement offer based on its (e) Every person who, with his
findings that such settlement is in written consent has been
the public interest. Any agreement named as having prepared or
to settle shall have no legal effect certified any part of the
until publicly disclosed. Such registration statement, or as
decision may be made without a having prepared or certified any
determination of guilt on the part of report or valuation which is
the person making the offer. used in connection with the
registration statement.
(f) Every selling shareholder who
contributed to and certified as
P. Civil Liabilities to the accuracy of a portion of
the registration statement.
1. On Account of False Registration (g) Every underwriter with respect to
Statement such security.
Who may sue? Possible Defense :
Any person Such person may allege that at the

 acquiring a security, the time of such acquisition he knew of no
registration statement of which such untrue statement or omission:
or any part thereof contains on
its effectivity an untrue
statement of a material fact or 2. On Account of Insider Trading
omits to state a material fact
required to be stated therein or Who may be sued?
necessary to make such
statements not misleading, and Any insider who violates Subsection
 who suffers damage 27.1 and any person in the case of a
tender offer who violates Subsection
If the person who acquired the 27.4 (a)(i), or any rule or regulation
security did so after the issuer has thereunder, by purchasing or selling a
made generally available to its security while in possession of
security holders an income material information not generally
statement covering a period of at available to the public, shall be liable
least 12 months, then the right of in a suit brought by any investor who,
recovery shall be conditioned on contemporaneously with the purchase
proof that such person acquired the or sale of securities that is the subject
security relying upon such untrue of the violation, purchased or sold
statement. securities of the same class unless
such insider, or such person in the
case of a tender offer, proves that
Who may be sued? such investor knew the information or
(a) The issuer and every person would have purchased or sold at the
who signed the registration same price regardless of disclosure of
statement; the information to him.
(b) Every person who was a director An insider who communicates
or a partner in the issuer at material non-public information, shall
the time of the filing of the be jointly and severally liable with and
registration statement or any to the same extent as, the insider, or
part, supplement or person in the case of a tender offer.
amendment thereof;

183
exceeding triple the amount of the
Q. Limitation of Actions transaction plus actual damages.
No action shall be maintained to enforce Exemplary damages may also be

any liability created under Section 56 awarded in cases of bad faith, fraud,
(false registration statement) or 57 malevolence or wantonness in the
(false prospectus. Communications, violation of this Code.
reports) unless brought within 2 years
after the discovery of the untrue
statement or the omission. The Court is also authorized to award
attorney’s fees not exceeding 30% of
If the action is to enforce a liability the award.
created under Subsection 57.1(a)
(registration of securities), unless
brought within 2 years after the 2. Persons liable to pay
violation upon which it is based.
All persons, including the issuer, held
In no event shall any such action be liable under the provisions of Sections
brought to enforce a liability created 56, 57, 58, 59, 60 and 61 shall
under Section 56 or Subsection 57.1 (a) contribute equally to the total liability
more than 5 years after the security was adjudged herein.
bona fide offered to the public, or
under Subsection 57.1 (b) (sale based In no case shall the principal
on false prospectus, communications, stockholders, directors and other
reports) more than 5 years after the officers, recover their contribution to
sale. the liability from the issuer. However,
the right of the issuer to recover from
No action shall be maintained to enforce the guilty parties the amount it has
any liability created under any other contributed shall not be prejudiced.
provision of this Code unless brought:
 within 2 years after the VI. Non-waiver of

discovery of the facts Provisions
constituting the cause of action
and Any condition, stipulation, provision
 within 5 years after such binding any person to waive compliance
cause of action accrued. with any provision of this Code or of any
rule of an Exchange as well as the waiver
itself, shal be void.
V. Damages to be
Awarded
R. Penalties
1. Amounts / Kinds of Damages
Any person who violates any of the
All suits to recover damages provisions of this Code or any person who,
pursuant to Sections 56 (false in a registration statement makes any
registration statement), 57 (false untrue statement of a material fact or
prospectus, communications, omits to state any material fact required
reports), 58 (fraud in connection to be stated therein or necessary to make
with securities transactions), 59 the statements therein not misleading,
(manipulation of prices), 60 shall, upon conviction, suffer
(commodity futures contracts and
pre-need plans) and 61 (insider  a fine of not less than P50,000.00
trading) shall be brought before the nor more than P5,000,000.00 or
RTC, which shall have exclusive  imprisonment of not less than 7
jurisdiction to hear and decide such years nor more than 21 years, or
suits.  both in the discretion of the court.
The Court is hereby authorized to If the offender is a corporation,

award damages in an amount not partnership or association or other
juridical entity, the penalty may be

184
imposed upon such juridical entity and
upon the officer or officers of the
corporation, partnership, association or
entity responsible for the violation. If
such officer is an alien, he shall in
addition to the penalties prescribed, be
deported.


The Securities Regulation Code: I. Non-Capital Markets

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

The Securities Regulation Code: I. Non-Capital Markets

Uploaded by

Copyright:

Available Formats

163

THE SECURITIES I. Non-Capital Markets

REGULATION CODE The places to go if you want to hedge or

1. Commodity Market – The instruments

a. Money Market – for short term Security – a forward exchange

Security – junk bonds (high II

The State shall establish a socially

[Lorybeth_Baldrias.head] [Nayna_Malayang.deputy] [Dionne_Sanchez.acads] [Jam_Jacob.design]

[Lorybeth_Baldrias.head] [Nayna_Malayang.deputy] [Dionne_Sanchez.acads] [Jam_Jacob.design]

5. Associated person of a broker or 12. Underwriter - a person who

[Lorybeth_Baldrias.head] [Nayna_Malayang.deputy] [Dionne_Sanchez.acads] [Jam_Jacob.design]

3. Notice of Filing 6. Acceptance or Rejection by SEC

 a registration statement has a) Acceptance

A registration statement may be The Commission may reject a

[Lorybeth_Baldrias.head] [Nayna_Malayang.deputy] [Dionne_Sanchez.acads] [Jam_Jacob.design]

 The issuer: Upon effectivity of the registration

[Lorybeth_Baldrias.head] [Nayna_Malayang.deputy] [Dionne_Sanchez.acads] [Jam_Jacob.design]

[Lorybeth_Baldrias.head] [Nayna_Malayang.deputy] [Dionne_Sanchez.acads] [Jam_Jacob.design]

[Lorybeth_Baldrias.head] [Nayna_Malayang.deputy] [Dionne_Sanchez.acads] [Jam_Jacob.design]

Securities offered exceed A broker or dealer who holds or

2. Proxy Solicitations F. Regulation of Transactions of

[Lorybeth_Baldrias.head] [Nayna_Malayang.deputy] [Dionne_Sanchez.acads] [Jam_Jacob.design]

[Lorybeth_Baldrias.head] [Nayna_Malayang.deputy] [Dionne_Sanchez.acads] [Jam_Jacob.design]

(e) To effect any series of Material non-public information:

Parties covered : It shall be unlawful for any insider to

[Lorybeth_Baldrias.head] [Nayna_Malayang.deputy] [Dionne_Sanchez.acads] [Jam_Jacob.design]

[Lorybeth_Baldrias.head] [Nayna_Malayang.deputy] [Dionne_Sanchez.acads] [Jam_Jacob.design]

[Lorybeth_Baldrias.head] [Nayna_Malayang.deputy] [Dionne_Sanchez.acads] [Jam_Jacob.design]

[Lorybeth_Baldrias.head] [Nayna_Malayang.deputy] [Dionne_Sanchez.acads] [Jam_Jacob.design]

[Lorybeth_Baldrias.head] [Nayna_Malayang.deputy] [Dionne_Sanchez.acads] [Jam_Jacob.design]

[Lorybeth_Baldrias.head] [Nayna_Malayang.deputy] [Dionne_Sanchez.acads] [Jam_Jacob.design]

 its own account,

Subsection (c) mandates that the

[Lorybeth_Baldrias.head] [Nayna_Malayang.deputy] [Dionne_Sanchez.acads] [Jam_Jacob.design]

[Lorybeth_Baldrias.head] [Nayna_Malayang.deputy] [Dionne_Sanchez.acads] [Jam_Jacob.design]

1. Margin Requirements It shall be unlawful for any registered

[Lorybeth_Baldrias.head] [Nayna_Malayang.deputy] [Dionne_Sanchez.acads] [Jam_Jacob.design]

[Lorybeth_Baldrias.head] [Nayna_Malayang.deputy] [Dionne_Sanchez.acads] [Jam_Jacob.design]

Who may sue? Possible Defense :

Any person Such person may allege that at the

[Lorybeth_Baldrias.head] [Nayna_Malayang.deputy] [Dionne_Sanchez.acads] [Jam_Jacob.design]

No action shall be maintained to enforce Exemplary damages may also be

 within 2 years after the VI. Non-waiver of

The Court is hereby authorized to If the offender is a corporation,

[Lorybeth_Baldrias.head] [Nayna_Malayang.deputy] [Dionne_Sanchez.acads] [Jam_Jacob.design]

[Lorybeth_Baldrias.head] [Nayna_Malayang.deputy] [Dionne_Sanchez.acads] [Jam_Jacob.design]

You might also like