FOREWORD

Republic Act No. 8799, otherwise known as the Securities Regulation Code, is a crucial
economic reform measure for the democratization of wealth and protection of investors
in the country.

With this end in view, the Securities and Exchange Commission issued the 2015
Implementing Rules and Regulations of the Securities Regulation Code, or the 2015 SRC
Rules, which took effect on 9 November 2015. This enhanced the rules issued in 2003 to
ensure that the implementation of the country’s securities law will serve its ultimate
purpose amid the changing times.

On the one hand, the 2015 SRC Rules facilitates greater access to capital by allowing for
the shelf registration of securities for up to three years (Rule 8.1.2) and exempting from
registration securities issued or guaranteed by certain multilateral finance entities (Rule
9.1.2.3) and public offerings with limited character such as employee stock option plans
(Rule 10.2).

It also relaxed the requirements for capital raising by requiring an issuer rating instead of
separate ratings for each issuance in the case of commercial papers (Rule 12.1.2.1.3)
and giving issuers leeway to enter into underwriting agreements other than those
structured on a firm commitment basis (Rule 12.1.1).

In addition, the period to sell securities was extended from two days to ten business days
from the date of the effectivity of the registration statement (Rule 8.1.1) and eased the
requirements and qualifications for qualified buyers (Rule 10.1.11).

On the other hand, the 2015 SRC Rules affords more protection to investors by promoting
transparency and accountability.

Tender offer rules, for one, were enhanced to protect the interest of minority investors
(Rule 19). The 2015 SRC Rules provided for two levels of action, disclosure and
mandatory tender offer, depending on the threshold triggered. It also provided for a set of
guidelines in the conduct of valuation and issuance of fairness opinion.

In parallel, the 2015 SRC Rules sets higher standards of transparency for securities
market professionals as part of efforts to deter illicit activities ranging from insider trading
to money laundering (Rule 28).
These enhanced rules are products of participatory rulemaking geared toward
strengthening and filling the gaps in our market and regulatory structures amid increasing
market sophistication and regional integration.

The Commission acknowledges the market participants and other stakeholders, who
actively contributed to refining of the implementing rules and regulations of the Securities
Regulation Code as early as when the initial draft was released for public comment in
2011.

Our work, however, is far from over. We will remain agile and proactive to ensure that
Philippine corporations and Filipino investors are not left behind.

EMILIO B. AQUINO
Chairperson