…enumerated in the SRC.
Are we meaning the individual traders nit
clear?
In fact, there is a talk of
establishing another type of SRO for
kaning mga short term na securities.
The creation of SRO is allowed
under the SRC so that’s one
Purpose of SRO
Atty: The market is the SRO through
which securities are traded. That is
the purpose of the SRO, that is the
market. You buy and sell through
the sro. It is the place where the
buyer and the seller meet to
exchange securities and csh. So the
PSE is actually a market where you
buy and sell securities
The src allows or the creation of
these SROs because SROs serve as
the market for securities. The sro
does not create the market, it is the
market. Ehat creates the market is
the SRC
So the regulartion in the SRC is to
create a free market that can
regulate itself. And that market is
the SRO
Other objectives?
How does the src ensure that the
public has access to the shares?
A certain portion of any offering is
allocated for local small investrs
just the qualified buyers, not just
the institutional buyers. There is a
minimum set aside for individuals in
every kind of offering. This is to
assure that the ownership of
enterprises are distributed not just
to big insttutions but to individual
shareholders as well
Promotes the development of
capital market how?
Eliminates insider tradin and other
fraudulent transactions
Recap: 7 Objectives of the SRC
1. To establish a socially
conscious, free market that
regulates itself
2. To encourage the widest
participation of ownership in
enterprises
3. To enhance the
democratization of wealth
4. To promote the development
of the capital market
5. To protect investors
6. To ensure full and fair
disclosure about securities
7. To eliminate insider trading
and other fraudulent or
manipulative devices
Atty: All of these objectives are
implemented in the body of the
SRC. The contents of the SRC is
geared towards achieving these
objectives. The SRC also enhances g. Prepare, approve, amend or
the powers of the SEC. repeal rules, regulations and
orders, and issue opinions
What are the powers of the SEC?
and provide guidance on and
(gipa-enumerate ra si Kate) supervise compliance with
a. Have jurisdiction and such rules, regulations and
supervision over all orders;
corporations, partnerships or h. Enlist the aid and support of
associations who are the and/or deputize any and all
grantees of primary enforcement agencies of the
franchises and/or a license or government, civil or military
a permit issued by the as well as any private
government; institutions, corporations,
b. Formulate policies and firm, association or person in
recommendations on issues the implementation of its
concerning the securities power and functions under
market, advise Congress and this Code;
other government agencies i. Issue cease and desist orders
on all aspects of the to prevent raud or injury to
securities market and the investing public;
propose legislation and j. Punish for contempt of the
amendments thereto; Commission, both direct and
c. Approve, reject, suspend, indirect, in accordance with
revoke or require the pertinent provisions of
amendments to registration and penalties prescribed by
statements and registration the Rules of Court;
and licensing applications; k. Compel the officers of any
d. Regulate, investigate or registered corporations or
supervise the activities of associations to call meetings
persons to ensure of stockholders or members
compliance; thereof under its supervision;
e. Supervise, monitor, suspend l. Issue subpoena duces tecum
or take over the activities of and summon witnesses to
exchanges, clearing agencies appear in any proceedings of
and other SROs; the Commission and in
f. Impose sanctions for the appropriate cases, order the
violation of law and the examination, search and
rules, regulations, and orders seizure of all docuements,
issued pursuant thereto; papers, files and records, tax
 returns and books of accounts directors, business
of any entity or person under associates, its officers or
investigation as may be partnership, amounting to
necessary for the proper fraud and misrepresentation
disposition of the cases which may be detrimental to
before it, subject to the the interest of the public
provisions of existing laws; and/or of the stockholder,
m. Suspend, or revoke, after partners; members of
proper notice and hearing the associations or organizations
franchise or certificate o registered with the
registration of corporations, Commission.
partnerships or associations b. Controversies arising out of
upon any of the grounds intra-corporate or
provided by law; partnership relations,
n. Exercise such other powers as between and among
may be provided by law as members, or associates;
well as those which may be between any or all of them
implied from, or which are and the corporation,
necessary or incidental to the partnership or association of
carrying out of, the express which they are stockholders,
powers granted the members or associates,
Commission to achieve the respectively; and between
objectives and purposes of such corporation, partnership
these laws. or association and the state
insofar as it concerns their
Powers approave amen revoke the individual franchise or right
registration of securities to exist as such entity;
c. Controversies in the election
or appointments of directors,
What are the Powers of SEC that trustees, officers or members
were taken by SRC? SEC no longer of such corporations,
exercises quasi-judicial functions. partnerships or associations.
The jurisdiction to hear intra-
corporate disputes were transferred Letter B pertains to intra-
to the regular courts. corporate disputes.

PD No. 902-A Section 5

What is an intra-corporate
a. Devices or schemes employed dispute?
by or any acts of the board of
 a. It is any dispute between
the stockholders or among
the stockholders or
members
b. Between a stockholder
and the corporation to
which he is a stockholder
c. The corporation and the
state but only with
respect to its existence
(these refer to quo
warranto proceedings)

2 tests to determine whether or not

a controversy is an intra-corporate
dispute:

a. Relationship Test – look at

the relationship between the
parties. Whether it is among
stockholders, between
stockholders and the
corporation, or the state
regarding the franchise
b. Nature Test – look at the
nature of the controversy or
if the issue pertains to the
enforcement of rights and
obligations of the parties
found in the Revised
Corporation Code or other
implementing rules.

If there is an intra-corporate
dispute, this must be filed in the
RTC...