Professional Documents
Culture Documents
Stocks are shares of ownership in a company. When you buy stocks of a publicly listed company, you become a stockholder or
shareholder of a company. In other words, you become a part-owner of that company.
As a part-owner, you participate in the companys growth and future profits. Conversely, you may also lose if the company
suffers a loss or performs below market expectations.
The number of stocks you acquire will determine how big or small your ownership is. As you acquire more stocks, your
ownership stake in the company becomes greater.
Other terms for stocks are shares or equities.
In Filipino, stocks are called sapi, which means to join or to partake.
TYPES OF STOCKS
Stocks are classified according to types and classes, depending on the characteristics and earnings potential.
According to RIGHTS
a. Common stock It is a security usually purchased for participation in the profits and control of ownership and
management of the company. A common stockholder exercises control through voting rights during annual or special
stockholders meetings, but can only claim rights to the companys assets and earnings when preferred shareholders are already
paid in full.
Most of the issues traded in the local stock market are common stocks. Common stocks are also known as ordinary shares.
b. Preferred stock It is a security whereby the holder has a higher claim on the assets and earnings of the company.
In terms of dividend payment and liquidation, preferred shareholders have priority over common shareholders. Though preferred
stockholders do not have voting rights, they are entitled toreceive dividends before any dividends are paid to the common
stockholders.
Preferred stocks usually have a specified limited rate of return or dividend and a specified limited redemption and liquidation
price.
Preferred stocks are also known as preference shares.
According to OWNERSHIP
Common shares may further be classified into:
a.
Class A These are stocks that can be exclusively traded by Filipino investors.
b.
Class B These are stocks that can be bought and sold by both Filipino and foreign investors.
Both classes have the same privilege and receive the same amount of dividends. Such classification of common shares is done to
monitor the equity ownership of both local and foreign investors.
According to SECTORS
Stocks listed and traded on the PSE are classified into six (6) sectors:
1.
2.
6.
Mining and Oil Sector includes companies engaged in mineral extraction, oil exploration, extraction and production
According to CHARACTERISTICS
Though there is no formal definition or criteria to classify a stock according to its characteristics, analysts generally describe
stocks as:
a. Blue Chip stocks are shares of well-established and financially sound companies that have demonstrated their ability to
pay dividends in both good and bad times. They also exhibit more modest but dependable returns and are relatively of lower
risk.
b. Income stocks are shares of those companies with good dividend payment history due to steady profits. Since they are
stable, income stocks generally have a lower level of volatility.
c. Growth stocks also called glamour stocks, are shares of corporations whose earnings are expected to grow at an aboveaverage rate relative to the market. A growth stock does not usually issue dividends as earnings are reinvested in capital projects.
d. Defensive stocks are shares that provide regular dividends and stable earnings, regardless of the overall condition of the
stock market. Defensive stocks remain stable under difficult economic conditions. Generally, these are stocks of food, oil, and
utilities companies, which are characterized by steady demand amidst hard times.
e. Cyclical stocks are those sensitive to business conditions or cycles strongly tied with the economys performance. These
companies produce or offer services that are low in demand during slowdown and increase when business peaks.
f. Speculative stocks are those that rise quickly when economic growth is strong and falls rapidly when growth is slowing
down. A speculative stock is considered very risky because of its volatility. It increases or decreases rapidly depending on the
economic conditions.
HOW TO START INVESTING IN STOCKS?
Getting started in the stock market is a simple process.
1.
At present, there are more than a hundred stockbrokerage companies to choose from.
When you choose a stockbroker, you need to consider the type of service you will require and who will best suit your needs. You
should remember that your stockbroker is your financial agent that will help you make your invested money grow. Stockbrokers
are also classified as traditional or online based on the services that they offer.
Traditional brokers are those who assign a licensed salesman to handle your account and take your orders via written instruction
or through a phone call. Online brokers, on the other hand, are those whose main interface with their customer is through the
Internet.
The full listing of stockbrokers is available in the PSE website www.pse.com.ph.
2.
The next step is to formally open a trading account. Similar to the process in opening a bank account, representatives of the
chosen stockbrokerage company will require you to fill out a Customer Account Information Form or CAIF. Accomplish this
along with the other requirements such as:
o Two (2) valid IDs;
o Specimen signature cards, and;
o Proof of billing.
3.
Discuss with your stockbroker the stocks you wish to BUY or SELL.
After opening a trading account, you can now start discussing with your stockbroker the stocks you wish to buy (or sell).
4.
Placing an order to buy or sell a stock can be done by making a telephone call or sending an SMS to your stockbroker. Orders can
also be placed directly online via the Internet.
5.
Once your order has been carried out, your stockbroker will give you a
confirmation invoice showing the details of your transaction.
6.
The delivery or payment should be before the settlement date. For traditional
stockbrokers, settlement of transactions is usually done after three (3)
working days from the transaction or T+3. For online stockbrokers,
settlement of all transactions is done on the transaction date.
7.
Receive PAYMENT.
The most traditional way to post a buy or sell order is by making a telephone call to your stockbroker and get firsthand advice
from him.
You may also post orders through text messaging, which may be arranged with a trader of a full service stockbrokerage house.
Note that there are certain risks involved including the possibility of your order not being received on time and accurately, or not
being received at all by the trader.
Online
Investors with online trading accounts post their buy or sell order via the Internet using the online trading platform of an online
stockbroker. With a few simple clicks, you may buy or sell stocks without the need to speak to your stockbroker. Online trading
allows faster posting of orders and settlement at a lower commission rate.
Face-to-face (walk-in)
Some stockbrokers have their own investors trading lounges where you can monitor stock price fluctuations through viewing
facilities and at the same time, personally post a buy or sell order through a trader.
PSE INVESTORS' PRIMER: BUILDING WEALTH WITH STOCKS
PSE Investors' Primer
This basic and easy-to-understand stock investing primer is principally intended for interested individuals and first-time
investors. The main objective of this literature is to orient people about the stock market and to guide them on how investing in
stocks can further secure one's financial future by becoming a successful investor.
POSTING AN ORDER
What basic information do I need to provide my stockbroker when posting an order?
When posting an order, you must tell your stockbroker the name of the listed company or the symbol of the stock to be bought or
sold, the price you are willing to buy or sell a specific stock and lastly, the number of shares to be traded.
Buy or Sell
Choose BUY to purchase shares or SELL to dispose shares.
Number of Shares
Indicate the number of shares to trademust be a whole number bigger than zero. All buying and selling orders are subject to a
minimum number of shares as prescribed by the board lot table instituted by the PSE. Prices in the market may fluctuate
according to the set intervals based on the price level of the shares. See the NEW PSE Board Lot Table.
Stock Symbol
State the name of the listed company or the symbol of the stock to be bought or sold. Go to Stock Symbol Lookup.
Price
Indicate the highest price you are willing to buy or lowest price you are willing to sell the stock to be bought or sold. Price may
be specified or based on the market depending on the type of order you want to post.
Order Type based on Price
The most common order types based on price are market (prevailing market price) and limit (specified price) orders. See Order
Types.
Order Type based on Expiration/Validity
Traders have access to many different types of orders classified according to validity such as Day, Good Till Cancelled (GTC),
Good Till Date (GTD) and Good Till Week (GTW).
TYPES OF STOCK TRADING ORDERS
What are the different types of stock trading orders?
All stock trades consist of at least two ordersone buy and one sell orderusually with one order to enter the trade, and one or
more orders to exit the trade.
A single order is either a buy order or a sell order. An order can be used either to enter a trade or to exit a trade. If a trade is
entered with a buy order, then it will be exited with a sell order, and vice versa. For example, if a trader expected the market's
price to go up, the simplest trade would consist of one buy order to enter the trade, and one sell order to exit the trade.
Conversely, if a trader expected the market's price to go down, the simplest trade would consist of one sell order to enter the
trade, and one buy order to exit the trade.
Traders have access to many different types of orders according to price and validity, which they can use in various combinations
to execute their clients trades. With this, a stockbrokers commission may depend on which type of order an investor prefers to
take.
The following explanations will explain each of the order types, and how these orders are used in stock trading.
1. Market Order
Market Order is the buying or selling of stocks without a specified price, or immediately at the prevailing market price when the
order is executed, whatever the price may be.
Market order is the simplest and quickest way to get your order completed. It is often subject to the lowest commission since
this is the easiest to execute.
For example, if stock ABCs current market price is Php2,500.00 per share, the investor should be willing to buy or sell at this
price level. Although being practiced in some other markets, this type of order is rarely used in the local equities market.
2. Limit Order
Limit Order is entered with a specified price known as the limit price. This allows investors to buy or sell at their desired buying
or selling price levels.
The primary difference between a market order and a limit order is that the stockbroker cannot guarantee that the former will be
executed at a specific price.
For example, stock ABCs current market price is Php2,500.00 per share. If the investor thinks that this price level is too
expensive, he may post a lower bid or buying price of Php2,450.00 per share. This means that his order will only be matched if
stock ABCs market price reaches Php2,450.00 per share or if when there are available sellers at Php2,450.00 per share.
3. Market on Opening/Closing Order
Market on Opening/Closing Order is accepted only during pre-open and pre-close periods and executed at the opening/closing
price of the instrument.
4. Market-to-Limit Order
Market-to-Limit Order is an order entered for immediate execution at the best price with whatever volume available and
remaining quantity will be queued as a limit order.
5. Stop Order (Stop Loss/Stop Limit)
Stop Orders are triggered when a specified price limit is reached. It becomes a market order as soon as its trigger price limit is
reached. There are two (2) kinds of stop orders:
a. Stop Loss Order
A Stop Loss Order stays inactive and is not displayed in the market until a trade occurs at the orders trigger price. It is
immediately treated as a Market Order when the order is triggered. It specifies only the trigger price.
b. Stop Limit Order
A Stop Limit Order is the same as the stop loss order wherein it also stays inactive and is not displayed to the market until a trade
occurs at the orders trigger price. Instead of specifying only one price, a stop limit order specifies two prices: the trigger price
and the limit price, which must exceed the limit price.
ORDER VALIDITY TYPES (according to time/validity)
a. Day Order (DAY)
Day Order is valid until the end of the trading day only. If the investors buying or selling order is not matched during the day,
this will automatically be cancelled and will have to be reposted by/for the investor on the next trading day.
b. Good Till Cancelled (GTC)
Good Till Cancelled is valid until cancelled by the investor or trader or until it has reached the set expiration date of the security.
c. Good Till Date (GTD)
Another most frequently used limit order is the Good Till Date which is valid until the date specified by the investor.
d. Good Till Week (GTW)
Good Till Week is a type of limit order which is valid for seven (7) calendar days. If unmatched within seven (7) calendar days,
the buy or sell order will automatically be cancelled and will have to be reposted by the investor though his trader or through his
online trading account.
e. Sliding Validity (SLIDING)
Sliding Validity Order is valid for 360 calendar days from the time it is posted.
f.
Fill-and-Kill (FAK)
The Fill-and-Kill (FAK) Order, also referred to as Execute-and-Eliminate Order, is valid upon execution. Fill-and-Kill orders
require the stockbroker to instantly execute a trade at the quoted market price. If the stockbroker is not capable of doing so, the
order is immediately discarded.
VOLUME QUALIFIERS
The following volume qualifiers to the Order types are accepted by the Trading System:
a.
Minimum-Quantity Order
Minimum-Quantity Orders must be executed immediately to the extent of the specified minimum quantity, with any remaining
unexecuted portion being added to the Order book, and shall only apply to Limit or Market-to-Limit Order.
b.
Iceberg Order
Iceberg Orders, also referred to as disclosed quantity orders, are orders which are successively entered in the Central Order
Book, and disclosed to the market at specified tranches. Disclosed quantity shall not be less than the specified percentage set by
the Exchange.
THE BOARD LOT TABLE
How much is the minimum amount of investment?
Trading of stocks is done by board lot or round lot system. The Board Lot Table determines the minimum number of shares one
can purchase or sell at a specific price range. Therefore, the minimum amount needed to invest in stocks varies and will depend
on the market price of the security as well as its corresponding board lot.
Prices of stocks move through a scale of set price fluctuations. Prices are thus adjusted along these fluctuations at a time.
Transactions which are beyond the prescribed number of maximum fluctuations from the last sale price are not allowed.
PRICE
From
0.0001
0.0100
0.0500
0.2500
0.5000
5.0000
10.0000
20.0000
50.0000
100.0000
200.0000
500.0000
1000.0000
2000.0000
5000.0000
To
0.0099
0.0490
0.2490
0.4950
4.9900
9.9900
19.9800
49.9500
99.9500
199.9000
499.8000
999.5000
1999.0000
4998.0000
UP
TICK SIZE
LOT SIZE
0.0001
0.0010
0.0010
0.0050
0.0100
0.0100
0.0200
0.0500
0.0500
0.1000
0.2000
0.5000
1.0000
2.0000
5.0000
1,000,000
100,000
10,000
10,000
1,000
100
100
100
10
10
10
10
5
5
5
9:30 a.m.
12:00 n.n.
1:30 p.m.
3:15 p.m.
3:20 p.m.
3:30 p.m.
Market Open
Market Recess
Market Resume
Pre-Close
Run-off / Trading At Last
Market Close
Investors may post a buy or sell order even after the trading period. However, this order will only be entered and matched through
the PSEs new trading system known as the PSEtrade, the next trading day.
WHO ARE THE MARKET PARTICIPANTS?
STOCK EXCHANGE
A stock exchange is an organized marketplace or facility that brings buyers and sellers together and facilitates the sale and
purchase of stocks.
The only stock exchange operating in the country is the Philippine Stock Exchange, Inc. (PSE). It makes sure that trading
transactions are done in an efficient, orderly, fair, and transparent manner. It enforces rules and regulations that its publicly listed
companies and trading participants must strictly abide by. In this way, the PSE fulfills its function as the guardian of the
Philippine stock market.
INVESTORS
Investors, also referred to as stockholders or shareholders, are those who own shares of stock of a publicly listed company. They
are accorded certain privileges like the right to fair and equal treatment, the right to vote and exercise related rights, and the right
to receive dividends and other benefits due to stockholders. They are classified as either retail or institutional, and local or
foreign.
STOCKBROKERS
A stockbroker or trading participant is licensed by the Securities and Exchange Commission (SEC) and is entitled to trade at the
Exchange. They act as an agent between a buyer and seller of stocks in the market. For their services as stockbrokers, they
receive from their clients either a buying or a selling commission.
The PSE originally issued 184 trading rights. To date, the PSE has 133 active stockbrokerage houses.
The representatives (licensed salesmen) of these accredited stockbrokers convene daily, at certain specified hours, on the trading
floor of the exchange, where they sell and buy shares of stocks for the account of their clients. They execute orders in the market
to the greatest possible advantage of their customers, by buying at the lowest possible price or by selling at the highest possible
price.
There are two (2) types of stockbrokers:
Traditional those who assign a licensed salesman to handle your account and to take your orders via a written instruction or
a phone call
Online those whose main interface is the internet where clients execute their orders and access market information online.
LISTED COMPANIES
Listed companies, also called issuers, are those whose shares of stock are traded on the Exchange. These companies qualified
with the stringent listing and reportorial requirements of the PSE, and have gone through initial public offering (IPO) or listing by
way of introduction.
As of August 2011, the PSE there are 249 listed companies in the PSE. These are classified into six different sectors: Financials,
Industrial, Holding Firms, Property, Services, and Mining and Oil.
CLEARING HOUSE
Securities Clearing Corporation of the Philippines (SCCP)
The SCCP is a wholly owned subsidiary of the Exchange. It was established to ensure the orderly settlement of equity trades
executed at the PSE. The SCCP uses the Central Clearing and Central Settlement (CCCS) system purchased from the Capital
Markets Co. (CAPCO) of Belgium.
SCCP is responsible for establishing the cash and securities liabilities and entitlements of its clearing members, synchronizing the
settlement of funds and the transfer of securities based on the delivery-versus-payment model or multilateral net settlement;
guaranteeing the settlement of trades in the event of a trading participants trade default in order to ensure the finality and
irrevocability of all Exchange trades through its fails management procedures; implementing appropriate risk management
measures in order to mitigate risks inherent in the clearing and settlement of Exchange trades and the maintenance and
administration of the Clearing and Trade Guarantee Fund (CTGF).
DEPOSITORY
Philippine Depository and Trust Corp. (PDTC)
The PDTC acts as securities depository or custodian of listed shares of stock that are traded at the PSE. It was organized to
establish a central depository in the Philippines and to implement scripless trading.
The PDTC performs book-entry transfer of securities:
1.
2.
3.
SETTLEMENT BANKS
The PSE has three (3) accredited banking institutions where trading participants make and receive payments for stock
transactions.
The settlement banks accept deposits of funds for payment of securities bought, confirm payments of due clearing obligations to
SCCP, debit buyers cash account and credit sellers cash account during settlement, and receive and/or return cash collateral put
up by clearing members to cover their daily trade negative exposures.
TRANSFER AGENTS
The stock transfer agent is considered the official keeper of the corporate shareholder records. The stock transfer agents
provide the issuer or the listed company with a list of holders of its securities. They effect transfer of beneficial ownership and
process corporate actions like stock or cash dividends, stock rights, stock splits, and collation of proxy forms.
The Basic Settlement Process
The settlement process refers to the completion of a PSE trade effected by the delivery and payment of the securities on
settlement date.
For traditional stockbrokers, settlement of all transactions, either buying or selling is usually done after three (3) trading days
from the transaction date or T+3. This means that the buyer must pay for the costs of the transaction to his stockbroker within
three (3) trading days after the trade was done. Similarly, the seller will receive the proceeds of the sale from the stockbroker after
the third day from the transaction date.
As such, cleared funds must be deposited in the clearing members cash settlement account in the settlement bank and securities
must be made available in the clearing members securities accounts in the central depositorys system not later than 12:00 noon
of settlement date. If securities are not delivered by the selling clearing member, the clearing house will not release the
corresponding cash entitlement to him, and vice versa. Late deliveries are imposed a monetary fine/penalty by the clearing
house.
For online stockbrokers, settlement of all transactions is done on the transaction date. To buy shares of stock, you will need to
fund your account prior to any purchase. In the same manner, the proceeds of your sale will be credited to your account not later
than three (3) working days from the transaction date.
In the past, stocks were quoted in fractions, but now, most exchanges use decimals. Stock quotes are updated regularly during the
trading day. Based on these numbers, investors can make decisions on whether to buy or sell, or hold the stocks.
Stock quotes and charts are often found in the financial section of a newspaper, financial magazine or online. These charts
provide details on the trends and stock prices of companies that trade stocks in the public trading markets, and the chart is
organized in a standardized format of ten (10) columns for easy reading. Here is how to read the basic stock quotes:
NAME
The name of the listed company.
SYMBOL
A unique alphabetic name which identifies the stocks of a listed company. Go to Stock Symbol Lookup
BID
The highest price that a buyer is willing and able to purchase for a share of stock at a particular time, also called the buyers
price.
ASK
The lowest price that a seller is willing and able to offer for sale for a share of stock, also called the sellers price".
OPEN
The opening price of the stock for the day.
HIGH
The highest traded price of a stock during a specific trading period.
LOW
The lowest traded price of a stock during a specific trading period.
CLOSE
The closing price of the trading day
CHANGE OF DIRECTION
Comes in the form of a triangle or arrow head pointing either up or down, which indicates whether the stocks is trading higher or
lower than the previous days closing price. The colors of the stock ticker symbols indicate the trading trends.
Sometimes, the change of direction is indicated by plus or minus symbols. In this case, plus equates to up and minus equates to
down.
VOLUME
The total number of shares traded during a given period of time.
VALUE
The amount of transactions in peso terms traded on a particular period. This indicates how much money is turned over from the
trading of stocks.
THE PSE COMPOSITE INDEX (PSEi)
The Philippine Stock Exchange Composite Index (PSEi), formerly called Phisix, is a fixed basket of thirty (30) common
stocks of listed companies, carefully selected to represent the general movement of the stock market. In other words, it is the
benchmark measuring the performance of the Philippine stock market.
The selection of these companies is based on a specific set of criteria. Under the revised policy on index management, companies
should meet three (3) criteria to qualify under the PSEi:
1. The companys free float level must be at least 12%.
2. The company must rank among the top 25% in terms of median daily value in nine out of the twelve-month period in review.
3. Ranking of TOP 30 qualified companies based on full market capitalization.
INVESTOR PROTECTION
As a regulator, how does the PSE protect the rights of the investing public?
The PSE and Securities and Exchange Commission (SEC) have put in place several safeguards that promote transparent, fair, and
organized buying and selling of stocks where every investor, big or small alike, are protected from fraud, manipulative trading
practices, and erring stockbrokers.
Some of the investor protection initiatives of the PSE are, but are not limited to the following:
1.
The PSE regularly monitors and audits the operations of stockbrokers. It ensures that business and trading practices of
stockbrokers conform with the laws stipulated in the Securities Regulation Code of the Philippines, including the Customer First
Policy, whereby stockbrokers orders must always surrender priority to their clients.
3.
The Risk Based Capital Adequacy is a PSE regulation which ensures that stockbrokers have enough capital to cover its exposure
to risks. It also ensures that stockbrokers are financially sound or liquid enough to promptly settle claims and other obligations to
clients.
4.
Disclosure Rules
Since timely and reliable company disclosures are essential components of a fair and efficient market, the PSE also sees to it that
listed companies promptly disclose factual and truthful information only.
a.
10-Minute Rule
The PSE requires that material information that which may affect a listed companys share price positively or negatively, are
disclosed within 10 minutes after its occurrence.
b.
Disclosures must also be done first to the PSE so that it will cascade information to every investor and general public through its
communication channels and not to a selected group of individuals only.
c.
The PSE Electronic Disclosure Generation Technology or PSE EDGE is a state-of-the-art, fully automated system that facilitates
the efficient processing, validation, submission, distribution, and analysis of time-sensitive disclosure reports submitted to the
Exchange. The new disclosure system, which was acquired from the Korea Exchange and replaces the PSE Online Disclosure
System (ODiSy), is equipped with a variety of features to further standardize the disclosure reporting process of PSEs listed
companies, improve investors disclosure searching and viewing experience, and enhance overall issuer transparency in the
market.
5.
CMIC was established for the primary purpose of reinforcing the confidence of the investing public in capital market institutions
and promoting a more active and vibrant market participation. Accordingly, CMIC acts as the independent audit, surveillance and
compliance arm of the Exchange.
As a self-regulatory organization, CMIC's primary mandate is to maintain the integrity of the market and minimize the risk of the
investing public by ensuring that the TPs adhere to all pertinent rules, regulations, and code of conduct of CMIC and the
Exchange, as well as all related legislative and regulatory requirements.
6.
To further enhance investor confidence, the CMIC oversees the market through a world-class and sophisticated surveillance
system called TMS, which was developed by the Korea Exchange. TMS is equipped with the critical elements of the surveillance
process and provides a robust monitoring and warning mechanism. It is designed to safeguard the integrity of the stock market
from fraud, manipulation, and breaches of marketplace rules. The CMIC conducts investigation of unusual price and volume
movements to identify and sanction trading participants, issuers or investors who might have committed unfair market practices.
7.
Another tool created for the protection of investors is the Securities Investors Protection Fund, Inc. or SIPF. The SIPF, which is
comparable to the Philippine Deposit Insurance Corp. providing insurance for bank deposits, seeks to build and enhance
investors confidence in the market and is envisioned to protect the investing public from extraordinary losses, other than the
ordinary market fluctuations, arising as a result of fraud, failure of business, or judicial insolvency of PSE-accredited
stockbrokers.
Protection to investors is automatic upon the opening of an account with a PSE-accredited stockbroker and given by way of
compensation for trade-related obligations of stockbrokers to its customers.
These safeguards, along with other investor protection initiatives of the PSE, serve to protect the health of the equities market and
the integrity of capital formation process, making investing in the Philippine stock market secure.
The PSE continues to perform its functions and duties under the law in ensuring that the market operates in an orderly, efficient,
and transparent manner, and that investors are properly protected.
INVESTOR RIGHTS
All investors must be fully aware of their basic legal rights as articulated in existing laws, rules, and regulations issued by the
government entities and the Exchange.
The PSE has been promoting shareholder activism to encourage shareholders to exercise their rights connected with their
investment transactions. Outline below is a summary of such rights. It covers the different phases of investment and includes preinvestment phase up to termination of the investment.
It is important to note that the rights presented in this section are simply a collation from relevant legal issuances. The basis for
any liability in connection with investment transactions shall still be the specific law, rule, and regulation.
1. RIGHT TO FAIR AND EQUAL TREATMENT
Every inventor should be given fair and equal treatment in terms of opportunities in terms of opportunities offers and access to
information.
2. RIGHT TO FULL, ACCURATE, AND TIMELY INFORMATION
Every investor should be given complete, accurate and timely information to allow them to make informed decisions about their
investments.
3. RIGHT TO VOTE AND EXERCISE RELATED RIGHTS
Every investor should be given the right to participate in the management of the business by voting on important decisions such
as who should be the directors and what major activities the business should undertake.
4. RIGHT TO HAVE FULL ACCESS TO FUNDS IN THE ACCOUNT
Every investor should be allowed to exercise rights of absolute ownership over his account and may be subjected to limitations
only with express consent.
5. RIGHT TO EXPECT THE BOARD, MANAGEMENT, BROKERS, AND AGENTS TO PERFORM THEIR
FUNCTIONS RESPONSIBLY
Every investor can expect the Board, management, brokers and agents to perform their duties and responsibilities in accordance
with a corporate culture of integrity, honesty and compliance with the spirit as well as the letter of the law.
6. RIGHT TO RELY ON THE COMPLETENESS, ACCURACY, AND TRUTHFULNESS OF ACCOUNTING AND
FINANCIAL STATEMENTS
Every investor should be able to rely on completeness, accuracy, reliability, relevance, and timeliness of accounting and financial
statements as certified by independent auditors.
7. RIGHT OF RECOURSE IN CASE OF DISPUTES CONCERNING THE ACCOUNT
Every investor has the right to know that in case a problem arises concerning his/her account, he/she has access to officers,
managers, and agents of brokerage firms and receive prompt attention.
8. RIGHT TO FAIR SECURITIES MARKETS WHERE TRADES ARE EXECUTED AT THE BEST POSSIBLE
PRICE
Every investor should be able to rely that stocks traded in the stock exchange is reflective of how the market values the company.
9. RIGHT TO EXPECT THAT THE REGULATORY BODIES ARE EXERCISING SUPERVISION OVER THE
INDUSTRY
Every investor should be able to rely on these institutions, their functions and duties under the law in ensuring that the market
operates in an orderly, efficient, and transparent manner and that investors are adequately protected.
10. RIGHT TO KNOW DIVIDEND POLICY, TO RECEIVE DIVIDENDS, AND TO ENJOY OTHER BENEFITS DUE
TO STOCKHOLDERS
Every investor should have a share of the profits of the company and enjoy other benefits as part-owner of the company.