63231-2000-The Securities Regulation Code PDF
63231-2000-The Securities Regulation Code PDF
63231-2000-The Securities Regulation Code PDF
CHAPTER I
Title and Definitions
SECTION 1. Title. This shall be known as "The Securities Regulation Code".
SECTION 2. Declaration of State Policy. The State shall establish a socially
conscious, free market that regulates itself, encourage the widest participation of
ownership in enterprises, enhance the democratization of wealth, promote the
development of the capital market, protect investors, ensure full and fair disclosure
about securities, minimize if not totally eliminate insider trading and other fraudulent or
manipulative devices and practices which create distortions in the free market. AcTHCE
3.9. "Pre-need plans" are contracts which provide for the performance of future
services or the payment of future monetary considerations at the time of actual need,
for which planholders pay in cash or installment at stated prices, with or without
interest or insurance coverage and includes life, pension, education, interment, and
other plans which the Commission may from time to time approve.
3.10. "Promoter" is a person who, acting alone or with others, takes initiative in
founding and organizing the business or enterprise of the issuer and receives
consideration therefor.
3.11. "Prospectus" is the document made by or on behalf of an issuer,
underwriter or dealer to sell or offer securities for sale to the public through a
registration statement filed with the Commission.
3.12. "Registration statement" is the application for the registration of securities
required to be filed with the Commission.
3.13. "Salesman" is a natural person, employed as such or as an agent, by a
dealer, issuer or broker to buy and sell securities.
3.14. "Uncerti cated security" is a security evidenced by electronic or similar
records. ITHADC
4.4. The salary of the Chairperson and the Commissioners shall be xed by the
President of the Philippines based on an objective classi cation system, at a sum
comparable to the members of the Monetary Board and commensurate to the
importance and responsibilities attached to the position.
4.5. The Commission shall hold meetings at least once a week for the conduct of
business or as often as may be necessary upon call of the Chairperson or upon the
request of three (3) Commissioners. The notice of the meeting shall be given to all
Commissioners and the presence of three (3) Commissioners shall constitute a
quorum. In the absence of the Chairperson, the most senior Commissioner shall act as
presiding officer of the meeting.
4.6. The Commission may, for purposes of ef ciency, delegate any of its
functions to any department or of ce of the Commission, an individual Commissioner
or staff member of the Commission except its review or appellate authority and its
power to adopt, alter and supplement any rule or regulation.
The Commission may review upon its own initiative or upon the petition of any
interested party any action of any department or of ce, individual Commissioner, or
staff member of the Commission. aACEID
(i) Issue cease and desist orders to prevent fraud or injury to the investing
public;
(j) Punish for contempt of the Commission, both direct and indirect, in
accordance with the pertinent provisions of and penalties prescribed
by the Rules of Court;
(k) Compel the of cers of any registered corporation or association to call
meetings of stockholders or members thereof under its supervision;
(l) Issue subpoena duces tecum and summon witnesses to appear in any
proceedings of the Commission and in appropriate cases, order the
examination, search and seizure of all documents, papers, les and
records, tax returns, and books of accounts of any entity or person
under investigation as may be necessary for the proper disposition of
the cases before it, subject to the provisions of existing laws;
(m) Suspend, or revoke, after proper notice and hearing the franchise or
certi cate of registration of corporations, partnerships or
associations, upon any of the grounds provided by law; and
(n) Exercise such other powers as may be provided by law as well as those
which may be implied from, or which are necessary or incidental to
the carrying out of, the express powers granted the Commission to
achieve the objectives and purposes of these laws. ICTacD
5.2. The Commission's jurisdiction over all cases enumerated under Section 5 of
Presidential Decree No. 902-A is hereby transferred to the Courts of general jurisdiction
or the appropriate Regional Trial Court: Provided, That the Supreme Court in the
exercise of its authority may designate the Regional Trial Court branches that shall
exercise jurisdiction over these cases. The Commission shall retain jurisdiction over
pending cases involving intra-corporate disputes submitted for nal resolution which
should be resolved within one (1) year from the enactment of this Code. The
Commission shall retain jurisdiction over pending suspension of
payments/rehabilitation cases filed as of 30 June 2000 until finally disposed.
SECTION 6. Indemni cation and Responsibilities of Commissioners . 6.1. The
Commission shall indemnify each Commissioner and other officials of the Commission,
including personnel performing supervision and examination functions for all costs and
expenses reasonably incurred by such persons in connection with any civil or criminal
actions, suits or proceedings to which they may be or made a party by reason of the
performance of their functions or duties, unless they are nally adjudged in such
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actions or proceedings to be liable for gross negligence or misconduct.
In the event of settlement or compromise, indemni cation shall be provided only
in connection with such matters covered by the settlement as to which the Commission
is advised by external counsel that the persons to be indemni ed did not commit any
gross negligence or misconduct.
The costs and expenses incurred in defending the aforementioned action, suit or
proceeding may be paid by the Commission in advance of the nal disposition of such
action, suit or proceeding upon receipt of an undertaking by or on behalf of the
Commissioner, of cer or employee to repay the amount advanced should it ultimately
be determined by the Commission that he/she is not entitled to be indemni ed as
provided in this subsection.
6.2. The Commissioners, of cers and employees of the Commission who
willfully violate this Code or who are guilty of negligence, abuse or acts of malfeasance
or fail to exercise extraordinary diligence in the performance of their duties shall be held
liable for any loss or injury suffered by the Commission or other institutions as a result
of such violation, negligence, abuse, malfeasance, or failure to exercise extraordinary
diligence.
Similar responsibility shall apply to the Commissioners, of cers and employees
of the Commission for (1) the disclosure of any information, discussion or resolution of
the Commission of a con dential nature, or about the con dential operations of the
Commission, unless the disclosure is in connection with the performance of of cial
functions with the Commission or with prior authorization of the Commissioners; or (2)
the use of such information for personal gain or to the detriment of the government, the
Commission or third parties: Provided, however, That any data or information required
to be submitted to the President and/or Congress or its appropriate committee, or to
be published under the provisions of this Code shall not be considered confidential. HACaSc
8.2. The Commission may conditionally approve the registration statement under
such terms as it may deem necessary.
8.3. The Commission may specify the terms and conditions under which any
written communication, including any summary prospectus, shall be deemed not to
constitute an offer for sale under this Section.
8.4. A record of the registration of securities shall be kept in a Register of
Securities in which shall be recorded orders entered by the Commission with respect to
such securities. Such register and all documents or information with respect to the
securities registered therein shall be open to public inspection at reasonable hours on
business days.
8.5. The Commission may audit the nancial statements, assets and other
information of a rm applying for registration of its securities whenever it deems the
same necessary to insure full disclosure or to protect the interest of the investors and
the public in general.
SECTION 9. Exempt Securities. 9.1. The requirement of registration under
Subsection 8.1 shall not as a general rule apply to any of the following classes of
securities:
(a) Any security issued or guaranteed by the Government of the Philippines,
or by any political subdivision or agency thereof, or by any person
controlled or supervised by, and acting as an instrumentality of said
Government.
(b) Any security issued or guaranteed by the government of any country with
which the Philippines maintains diplomatic relations, or by any state,
province or political subdivision thereof on the basis of reciprocity:
Provided, That the Commission may require compliance with the form
and content of disclosures the Commission may prescribe.
(c) Certi cates issued by a receiver or by a trustee in bankruptcy duly
approved by the proper adjudicatory body.
(d) Any security or its derivatives the sale or transfer of which, by law, is
under the supervision and regulation of the Of ce of the Insurance
Commission, Housing and Land Use Regulatory Board, or the Bureau
of Internal Revenue.
(e) Any security issued by a bank except its own shares of stock.
9.2. The Commission may, by rule or regulation after public hearing, add to the
foregoing any class of securities if it nds that the enforcement of this Code with
respect to such securities is not necessary in the public interest and for the protection
of investors. ATcaID
(f) The issuance of bonds or notes secured by mortgage upon real estate or
tangible personal property, where the entire mortgage together with
all the bonds or notes secured thereby are sold to a single purchaser
at a single sale.
(g) The issue and delivery of any security in exchange for any other security
of the same issuer pursuant to a right of conversion entitling the
holder of the security surrendered in exchange to make such
conversion: Provided, That the security so surrendered has been
registered under this Code or was, when sold, exempt from the
provisions of this Code, and that the security issued and delivered in
exchange, if sold at the conversion price, would at the time of such
conversion fall within the class of securities entitled to registration
under this Code. Upon such conversion the par value of the security
surrendered in such exchange shall be deemed the price at which the
securities issued and delivered in such exchange are sold.
(h) Broker's transactions, executed upon customer's orders, on any
registered Exchange or other trading market.
(i) Subscriptions for shares of the capital stock of a corporation prior to the
incorporation thereof or in pursuance of an increase in its authorized
capital stock under the Corporation Code, when no expense is
incurred, or no commission, compensation or remuneration is paid or
given in connection with the sale or disposition of such securities, and
only when the purpose for soliciting, giving or taking of such
subscriptions is to comply with the requirements of such law as to
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the percentage of the capital stock of a corporation which should be
subscribed before it can be registered and duly incorporated, or its
authorized capital increased.
(j) The exchange of securities by the issuer with its existing security holders
exclusively, where no commission or other remuneration is paid or
given directly or indirectly for soliciting such exchange. ETIcHa
(k) The sale of securities by an issuer to fewer than twenty (20) persons in
the Philippines during any twelve-month period.
(l) The sale of securities to any number of the following qualified buyers:
(i) Bank;
(ii) Registered investment house;
(iii) Insurance company;
(iv) Pension fund or retirement plan maintained by the Government of
the Philippines or any political subdivision thereof or managed
by a bank or other persons authorized by the Bangko Sentral to
engage in trust functions;
DHIaTS
12.5. (a) Upon ling of the registration statement, the issuer shall pay to the
Commission a fee of not more than one-tenth (1/10) of one per centum (1%) of the
maximum aggregate price at which such securities are proposed to be offered. The
Commission shall prescribe by rule diminishing fees in inverse proportion the value of
the aggregate price of the offering.
(b) Notice of the ling of the registration statement shall be immediately
published by the issuer, at its own expense, in two (2) newspapers of general
circulation in the Philippines, once a week for two (2) consecutive weeks, or in such
other manner as the Commission by rule shall prescribe, reciting that a registration
statement for the sale of such security has been led, and that the aforesaid
registration statement, as well as the papers attached thereto are open to inspection at
the Commission during business hours, and copies thereof, photostatic or otherwise,
shall be furnished to interested parties at such reasonable charge as the Commission
may prescribe.
12.6. Within forty- ve (45) days after the date of ling of the registration
statement, or by such later date to which the issuer has consented, the Commission
shall declare the registration statement effective or rejected, unless the applicant is
allowed to amend the registration statement as provided in Section 14 hereof. The
Commission shall enter an order declaring the registration statement to be effective if
it nds that the registration statement together with all the other papers and
documents attached thereto, is on its face complete and that the requirements have
been complied with. The Commission may impose such terms and conditions as may
be necessary or appropriate for the protection of the investors. CaATDE
12.7. Upon effectivity of the registration statement, the issuer shall state under
oath in every prospectus that all registration requirements have been met and that all
information are true and correct as represented by the issuer or the one making the
statement. Any untrue statement of fact or omission to state a material fact required to
be stated therein or necessary to make the statement therein not misleading shall
constitute fraud.
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SECTION 13. Rejection and Revocation of Registration of Securities. 13.1. The
Commission may reject a registration statement and refuse registration of the security
thereunder, or revoke the effectivity of a registration statement and the registration of
the security thereunder after due notice and hearing by issuing an order to such effect,
setting forth its findings in respect thereto, if it finds that:
(a) The issuer:
(i) Has been judicially declared insolvent;
(ii) Has violated any of the provisions of this Code, the rules
promulgated pursuant thereto, or any order of the Commission
of which the issuer has notice in connection with the offering
for which the registration statement has been filed;
(iii) Has been or is engaged or is about to engage in fraudulent
transactions; HcDSaT
13.2. The Commission may compel the production of all the books and papers of
such issuer, and may administer oaths to, and examine the of cers of such issuer or
any other person connected therewith as to its business and affairs.
13.3. If any issuer shall refuse to permit an examination to be made by the
Commission, its refusal shall be ground for the refusal or revocation of the registration
of its securities.
13.4. If the Commission deems it necessary, it may issue an order suspending
the offer and sale of the securities pending any investigation. The order shall state the
grounds for taking such action, but such order of suspension although binding upon the
persons noti ed thereof, shall be deemed con dential, and shall not be published. Upon
the issuance of the suspension order, no further offer or sale of such security shall be
made until the same is lifted or set aside by the Commission. Otherwise, such sale shall
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be void.
13.5. Notice of issuance of such order shall be given to the issuer and every
dealer and broker who shall have noti ed the Commission of an intention to sell such
security.
13.6. A registration statement may be withdrawn by the issuer only with the
consent of the Commission. EScIAa
CHAPTER V
Reportorial Requirements
SECTION 17. Periodic and Other Reports of Issuers. 17.1. Every issuer
satisfying the requirements in Subsection 17.2 hereof shall file with the Commission:
(a) Within one hundred thirty- ve (135) days, after the end of the issuer's
scal year, or such other time as the Commission may prescribe, an
annual report which shall include, among others, a balance sheet,
pro t and loss statement and statement of cash ows, for such last
scal year, certi ed by an independent certi ed public accountant,
and a management discussion and analysis of results of operations;
and
(b) Such other periodical reports for interim scal periods and current
reports on signi cant developments of the issuer as the Commission
may prescribe as necessary to keep current information on the
operation of the business and financial condition of the issuer.
17.2. The reportorial requirements of Subsection 17.1 shall apply to the
following:
(a) An issuer which has sold a class of its securities pursuant to a
registration under Section 12 hereof: Provided, however, That the
obligation of such issuer to le reports shall be suspended for any
scal year after the year such registration became effective if such
issuer, as of the rst day of any such scal year, has less than one
hundred (100) holders of such class of securities or such other
number as the Commission shall prescribe and it noti es the
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Commission of such; cTACIa
(b) An issuer with a class of securities listed for trading on an Exchange; and
(c) An issuer with assets of at least Fifty million pesos (P50,000,000.00) or
such other amount as the Commission shall prescribe, and having two
hundred (200) or more holders each holding at least one hundred
(100) shares of a class of its equity securities: Provided, however,
That the obligation of such issuer to le reports shall be terminated
ninety (90) days after noti cation to the Commission by the issuer
that the number of its holders holding at least one hundred (100)
shares is reduced to less than one hundred (100).
17.3. Every issuer of a security listed for trading on an Exchange shall file with the
Exchange a copy of any report filed with the Commission under Subsection 17.1 hereof.
17.4. All reports (including nancial statements) required to be led with the
Commission pursuant to Subsection 17.1 hereof shall be in such form, contain such
information and be led at such times as the Commission shall prescribe, and shall be
in lieu of any periodical or current reports or nancial statements otherwise required to
be filed under the Corporation Code.
17.5. Every issuer which has a class of equity securities satisfying any of the
requirements in Subsection 17.2 shall furnish to each holder of such equity security an
annual report in such form and containing such information as the Commission shall
prescribe. DcaECT
17.6. Within such period as the Commission may prescribe preceding the annual
meeting of the holders of any equity security of a class entitled to vote at such meeting,
the issuer shall transmit to such holders an annual report in conformity with Subsection
17.5.
SECTION 18. Reports by Five per centum (5%) Holders of Equity Securities.
18.1. In every case in which an issuer satis es the requirements of Subsection 17.2
hereof, any person who acquires directly or indirectly the bene cial ownership of more
than ve per centum (5%) of such class or in excess of such lesser per centum as the
Commission by rule may prescribe, shall, within ten (10) days after such acquisition or
such reasonable time as xed by the Commission, submit to the issuer of the security,
to the Exchange where the security is traded, and to the Commission a sworn
statement containing the following information and such other information as the
Commission may require in the public interest or for the protection of investors:
(a) The personal background, identity, residence, and citizenship of, and the
nature of such bene cial ownership by, such person and all other
persons by whom or on whose behalf the purchases are effected; in
the event the bene cial owner is a juridical person, the lines of
business of the beneficial owner shall also be reported;
(b) If the purpose of the purchases or prospective purchases is to acquire
control of the business of the issuer of the securities, any plans or
proposals which such persons may have that will effect a major
change in its business or corporate structure;
(c) The number of shares of such security which are bene cially owned, and
the number of shares concerning which there is a right to acquire,
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directly or indirectly, by: (i) such person, and (ii) each associate of
such person, giving the background, identity, residence, and
citizenship of each such associate; and
(d) Information as to any contracts, arrangements, or understanding with
any person with respect to any securities of the issuer including but
not limited to transfer, joint ventures, loan or option arrangements,
puts or calls, guarantees or division of losses or pro ts, or proxies
naming the persons with whom such contracts, arrangements, or
understanding have been entered into, and giving the details thereof.
SaCDTA
18.2. If any change occurs in the facts set forth in the statements, an amendment
shall be transmitted to the issuer, the Exchange and the Commission.
18.3. The Commission, may permit any person to le in lieu of the statement
required by Subsection 17.1 hereof, a notice stating the name of such person, the
shares of any equity securities subject to Subsection 17.1 which are owned by him, the
date of their acquisition and such other information as the Commission may specify, if
it appears to the Commission that such securities were acquired by such person in the
ordinary course of his business and were not acquired for the purpose of and do not
have the effect of changing or in uencing the control of the issuer nor in connection
with any transaction having such purpose or effect.
CHAPTER VI
Protection of Shareholder Interests
SECTION 19. Tender Offers. 19.1. (a) Any person or group of persons acting in
concert who intends to acquire at least fteen percent (15%) of any class of any equity
security of a listed corporation or of any class of any equity security of a corporation
with assets of at least Fifty million pesos (P50,000,000.00) and having two hundred
(200) or more stockholders with at least one hundred (100) shares each or who
intends to acquire at least thirty percent (30%) of such equity over a period of twelve
(12) months shall make a tender offer to stockholders by ling with the Commission a
declaration to that effect; and furnish the issuer, a statement containing such of the
information required in Section 17 of this Code as the Commission may prescribe. Such
person or group of persons shall publish all requests or invitations for tender, or
materials making a tender offer or requesting or inviting letters of such a security.
Copies of any additional material soliciting or requesting such tender offers
subsequent to the initial solicitation or request shall contain such information as the
Commission may prescribe, and shall be led with the Commission and sent to the
issuer not later than the time copies of such materials are rst published or sent or
given to security holders.
(b) Any solicitation or recommendation to the holders of such a security to
accept or reject a tender offer or request or invitation for tenders shall be made in
accordance with such rules and regulations as the Commission may prescribe. cEaTHD
SECTION 20. Proxy Solicitations. 20.1. Proxies must be issued and proxy
solicitation must be made in accordance with rules and regulations to be issued by the
Commission.
20.2. Proxies must be in writing, signed by the stockholder or his duly authorized
representative and filed before the scheduled meeting with the corporate secretary.
20.3. Unless otherwise provided in the proxy, it shall be valid only for the meeting
for which it is intended. No proxy shall be valid and effective for a period longer than
five (5) years at one time.
20.4. No broker or dealer shall give any proxy, consent or authorization, in respect
of any security carried for the account of a customer, to a person other than the
customer, without the express written authorization of such customer.
20.5. A broker or dealer who holds or acquires the proxy for at least ten per
centum (10%) or such percentage as the Commission may prescribe of the outstanding
share of the issuer, shall submit a report identifying the bene cial owner within ten (10)
days after such acquisition, for its own account or customer, to the issuer of the
security, to the Exchange where the security is traded and to the Commission. EHTIcD
SECTION 21. Fees for Tender Offers and Certain Proxy Solicitations . At the
time of ling with the Commission of any statement required under Section 19 for any
tender offer or Section 72.2 for issuer repurchases, or Section 20 for proxy or consent
solicitation, the Commission may require that the person making such filing pay a fee of
not more than one-tenth (1/10) of one percentum (1%) of:
21.1. The proposed aggregate purchase price in the case of a transaction under
Sections 20 or 72.2; or
21.2. The proposed payment in cash, and the value of any securities or property
to be transferred in the acquisition, merger or consolidation, or the cash and value of
any securities proposed to be received upon the sale or disposition of such assets in
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the case of a solicitation under Section 20. The Commission shall prescribe by rule
diminishing fees in inverse proportion to the value of the aggregate price of the
offering.
SECTION 22. Internal Record Keeping and Accounting Controls. Every issuer
which has a class of securities that satisfies the requirements of Subsection 17.2 shall:
22.1. Make and keep books, records, and accounts which, in reasonable detail
accurately and fairly reflect the transactions and dispositions of assets of the issuer;
22.2. Devise and maintain a system of internal accounting controls suf cient to
provide reasonable assurances that: (a) Transactions and access to assets are
pursuant to management authorization; (b) Financial statements are prepared in
conformity with generally accepted accounting principles that are adopted by the
Accounting Standards Council and the rules promulgated by the Commission with
regard to the preparation of nancial statements; and (c) Recorded assets are
compared with existing assets at reasonable intervals and differences are reconciled.
aEHIDT
23.3. It shall be unlawful for any such bene cial owner, director, or of cer,
directly or indirectly, to sell any equity security of such issuer if the person selling the
security or his principal: (a) Does not own the security sold; or (b) If owning the security,
does not deliver it against such sale within twenty (20) days thereafter, or does not
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within ve (5) days after such sale deposit it in the mails or other usual channels of
transportation; but no person shall be deemed to have violated this subsection if he
proves that notwithstanding the exercise of good faith he was unable to make such
delivery or deposit within such time, or that to do so would cause undue inconvenience
or expense.
23.4. The provisions of Subsection 23.2 shall not apply to any purchase and sale,
or sale and purchase, and the provisions of Subsection 23.3 shall not apply to any sale,
of an equity security not then or thereafter held by him in an investment account, by a
dealer in the ordinary course of his business and incident to the establishment or
maintenance by him of a primary or secondary market, otherwise than on an Exchange,
for such security. The Commission may, by such rules and regulations as it deems
necessary or appropriate in the public interest, de ne and prescribe terms and
conditions with respect to securities held in an investment account and transactions
made in the ordinary course of business and incident to the establishment or
maintenance of a primary or secondary market.
CHAPTER VII
Prohibitions on Fraud, Manipulation and Insider Trading
SECTION 24. Manipulation of Security Prices; Devices and Practices. 24.1 It
shall be unlawful for any person acting for himself or through a dealer or broker, directly
or indirectly:
(a) To create a false or misleading appearance of active trading in any listed
security traded in an Exchange or any other trading market (hereafter
referred to purposes of this Chapter as "Exchange"):
(i) By effecting any transaction in such security which involves no
change in the beneficial ownership thereof;
(ii) By entering an order or orders for the purchase or sale of such
security with the knowledge that a simultaneous order or
orders of substantially the same size, time and price, for the
sale or purchase of any such security, has or will be entered by
or for the same or different parties; or
(iii) By performing similar act where there is no change in bene cial
ownership. CAcDTI
(e) To effect, either alone or others, any series of transactions for the
purchase and/or sale of any security traded in an Exchange for the
purpose of pegging, xing or stabilizing the price of such security,
unless otherwise allowed by this Code or by rules of the Commission.
24.2. No person shall use or employ, in connection with the purchase or sale of
any security any manipulative or deceptive device or contrivance. Neither shall any short
sale be effected nor any stop-loss order be executed in connection with the purchase
or sale of any security except in accordance with such rules and regulations as the
Commission may prescribe as necessary or appropriate in the public interest or for the
protection of investors.
24.3. The foregoing provisions notwithstanding, the Commission, having due
regard to the public interest and the protection of investors, may, by rules and
regulations, allow certain acts or transactions that may otherwise be prohibited under
this Section.
SECTION 25. Regulation of Option Trading . No member of an Exchange shall,
directly or indirectly endorse or guarantee the performance of any put, call, straddle,
option or privilege in relation to any security registered on a securities exchange.
The terms "put", "call", "straddle", "option", or "privilege" shall not include any
registered warrant, right or convertible security. DAEICc
27.2. For purposes of this Section, information is "material nonpublic" if: (a) It has
not been generally disclosed to the public and would likely affect the market price of
the security after being disseminated to the public and the lapse of a reasonable time
for the market to absorb the information; or (b) would be considered by a reasonable
person important under the circumstances in determining his course of action whether
to buy, sell or hold a security.
27.3. It shall be unlawful for any insider to communicate material nonpublic
information about the issuer or the security to any person who, by virtue of the
communication, becomes an insider as de ned in Subsection 3.8, where the insider
communicating the information knows or has reason to believe that such person will
likely buy or sell a security of the issuer while in possession of such information.
27.4. a) It shall be unlawful where a tender offer has commenced or is about to
commence for:
(i) Any person (other than the tender offeror) who is in possession of
material nonpublic information relating to such tender offer, to buy or
sell the securities of the issuer that are sought or to be sought by
such tender offer if such person knows or has reason to believe that
the information is nonpublic and has been acquired directly or
indirectly from the tender offeror, those acting on its behalf, the issuer
of the securities sought or to be sought by such tender offer, or any
insider of such issuer; and
(ii) Any tender offeror, those acting on its behalf, the issuer of the securities
sought or to be sought by such tender offer, and any insider of such
issuer to communicate material nonpublic information relating to the
tender offer to any other person where such communication is likely
to result in a violation of Subsection 27.4 (a)(i).SCEHaD
(b) For purposes of this subsection the term "securities of the issuer sought or
to be sought by such tender offer" shall include any securities convertible or
exchangeable into such securities or any options or rights in any of the foregoing
securities.
CHAPTER VIII
Regulation of Securities Market Professionals
SECTION 28. Registration of Brokers, Dealers, Salesmen and Associated
Persons. 28.1. No person shall engage in the business of buying or selling securities
in the Philippines as a broker or dealer, or act as a salesman, or an associated person
of any broker or dealer unless registered as such with the Commission.
28.2. No registered broker or dealer shall employ any salesman or any
associated person, and no issuer shall employ any salesman, who is not registered as
such with the Commission.
28.3. The Commission, by rule or order, may conditionally or unconditionally
exempt from Subsections 28.1 and 28.2 any broker, dealer, salesman, associated
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person of any broker or dealer, or any class of the foregoing, as it deems consistent
with the public interest and the protection of investors.
28.4. The Commission shall promulgate rules and regulations prescribing the
quali cations for registration of each category of applicant, which shall, among other
things, require as a condition for registration that:
(a) If a natural person, the applicant satisfactorily pass a written
examination as to his pro ciency and knowledge in the area of activity
for which registration is sought;
(b) In the case of a broker or dealer, the applicant satisfy a minimum net
capital as prescribed by the Commission, and provide a bond or other
security as the Commission may prescribe to secure compliance with
the provisions of this Code; and
(c) If located outside of the Philippines, the applicant les a written consent
to service of process upon the Commission pursuant to Section 65
hereof. DSTCIa
28.5. A broker or dealer may apply for registration by ling with the Commission
a written application in such form and containing such information and documents
concerning such broker or dealer as the Commission by rule shall prescribe.
28.6. Registration of a salesman or of an associated person of a registered
broker or dealer may be made upon written application led with the Commission by
such salesman or associated person. The application shall be separately signed and
certi ed by the registered broker or dealer to which such salesman or associated
person is to become af liated, or by the issuer in the case of a salesman employed,
appointed or authorized solely by such issuer. The application shall be in such form and
contain such information and documents concerning the salesman or associated
person as the Commission by rule shall prescribe. For purposes of this Section, a
salesman shall not include any employee of an issuer whose compensation is not
determined directly or indirectly on sales of securities of the issuer.
28.7. Applications led pursuant to Subsections 28.5 and 28.6 shall be
accompanied by a registration fee in such reasonable amount prescribed by the
Commission.
28.8. Within thirty (30) days after the ling of any application under this Section,
the Commission shall by order: (a) Grant registration if it determines that the
requirements of this Section and the quali cations for registration set forth in its rules
and regulations have been satisfied; or (b) Deny said registration. TAIaHE
28.9. The names and addresses of all persons approved for registration as
brokers, dealers, associated persons or salesmen and all orders of the Commission
with respect thereto shall be recorded in a Register of Securities Market Professionals
kept in the office of the Commission which shall be open to public inspection.
28.10. Every person registered pursuant to this Section shall le with the
Commission, in such form as the Commission shall prescribe, information necessary to
keep the application for registration current and accurate, including in the case of a
broker or dealer changes in salesmen, associated persons and owners thereof.
28.11. Every person registered pursuant to this Section shall pay to the
Commission an annual fee at such time and in such reasonable amount as the
Commission shall prescribe. Upon notice by the Commission that such annual fee has
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not been paid as required, the registration of such person shall be suspended until
payment has been made.
28.12. The registration of a salesman or associated person shall be
automatically terminated upon the cessation of his af liation with said registered
broker or dealer, or with an issuer in the case of a salesman employed, appointed or
authorized by such issuer. Promptly following any such cessation of af liation, the
registered broker or dealer, or issuer, as the case may be, shall le with the
Commission a notice of separation of such salesman or associated person. AEIDTc
(f) That the brokers in the board of the Exchange shall comprise of not more
than forty-nine percent (49%) of such board and shall proportionately
represent the Exchange membership in terms of volume/value of
trade and paid up capital, and that any natural person associated with
a juridical entity that is a member shall himself be deemed to be a
member for this purpose: Provided, That any registered Exchange
existing prior to the effectivity of this Code shall immediately comply
with this requirement;
(g) For the board of the Exchange to include in its composition (i) the
president of the Exchange, and (ii) no less than fty one percent (51%)
of the remaining members of the board to be comprised of three (3)
independent directors and persons who represent the interests of
issuers, investors, and other market participants, who are not
associated with any broker or dealer or member of the Exchange for a
period of two (2) years prior to his/her appointment. No of cer or
employee of a member, its subsidiaries or af liates or related
interests shall become an independent director: Provided, however,
That the Commission may by rule, regulation, or order upon
application, permit the exchange organized as a stock corporation to
use a different governance structure: Provided, further, That the
Commission is satis ed that the Exchange is acting in the public
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interest and is able to effectively operate as a self-regulatory
organization under this Code: Provided, nally , That any registered
exchange existing prior to the effectivity of this Code shall
immediately comply with this requirement.ASTcaE
(h) The president and other management of the Exchange to consist only of
persons who are not members and are not associated in any capacity,
directly or indirectly with any broker or dealer or member or listed
company of the Exchange: Provided, That the Exchange may only
appoint, and a person may only serve, as an of cer of the exchange if
such person has not been a member or af liated with any broker,
dealer, or member of the Exchange for a period of at least two (2)
years prior to such appointment;
(i) The transparency of transactions on the Exchange;
(j) The equitable allocation of reasonable dues, fees, and other charges
among members and issuers and other persons using any facility or
system which the Exchange operates or controls;
(k) Prevention of fraudulent and manipulative acts and practices, promotion
of just and equitable principles of trade, and, in general, protection of
investors and the public interest; and
(l) The transparent, prompt and accurate clearance and settlement of
transactions effected on the Exchange.
33.3. If the Commission nds that the applicant Exchange is capable of
complying and enforcing compliance by its members, and persons associated with
such members, with the provisions of this Code, its rules and regulations, and the rules
of the Exchange, and that the rules of the Exchange are fair, just and adequate, the
Commission shall cause such Exchange to be registered. If, after notice due and
hearing, the Commission finds otherwise, the application shall be denied. ATcaHS
33.4. Within ninety (90) days after the ling of the application the Commission
may issue an order either granting or denying registration as an Exchange, unless the
Exchange applying for registration shall withdraw its application or shall consent to the
Commission's deferring action on its application for a stated longer period after the
date of ling. The ling with the Commission of an application for registration by an
Exchange shall be deemed to have taken place upon the receipt thereof. Amendments
to an application may be made upon such terms as the Commission may prescribe.
33.5. Upon the registration of an Exchange, it shall pay a fee in such amount and
within such period as the Commission may fix.
33.6. Upon appropriate application in accordance with the rules and regulations
of the Commission and upon such terms as the Commission may deem necessary for
the protection of investors, an Exchange may withdraw its registration or suspend its
operations or resume the same.
SECTION 34. Segregation and Limitation of Functions of Members, Brokers and
Dealers. 34.1. It shall be unlawful for any member-broker of an Exchange to effect
any transaction on such Exchange for its own account, the account of an associated
person, or an account with respect to which it or an associated person thereof
exercises investment discretion: Provided, however, That this Section shall not make
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unlawful
(a) Any transaction by a member-broker acting in the capacity of a market
maker; ETDSAc
36.4. The Commission, having due regard to the public interest, the protection of
investors, the safeguarding of securities and funds, and maintenance of fair
competition among brokers, dealers, clearing agencies, and transfer agents, shall
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promulgate rules and regulations for the prompt and accurate clearance and
settlement of securities transactions.
36.5. (a) The Commission may establish or facilitate the establishment of trust
funds which shall be contributed by Exchanges, brokers, dealers, underwriters, transfer
agents, salesmen and other persons transacting in securities, as the Commission may
require, for the purpose of compensating investors for the extraordinary losses or
damage they may suffer due to business failure or fraud or mismanagement of the
persons with whom they transact, under such rules and regulations as the Commission
may from time to time prescribe or approve in the public interest.
(b) The Commission may, having due regard to the public interest or the
protection of investors, regulate, supervise, examine, suspend or otherwise discontinue
such and other similar funds under such rules and regulations which the Commission
may promulgate, and which may include taking custody and management of the fund
itself as well as investments in and disbursements from the funds under such forms of
control and supervision by the Commission as it may from time to time require. The
authority granted to the Commission under this subsection shall also apply to all funds
established for the protection of investors, whether established by the Commission or
otherwise.
SECTION 37. Registration of Innovative and Other Trading Markets . The
Commission, having due regard for national economic development, shall encourage
competitiveness in the market by promulgating within six (6) months upon the
enactment of this Code, rules for the registration and licensing of innovative and other
trading markets or Exchanges covering, but not limited to, the issuance and trading of
innovative securities, securities of small, medium, growth and venture enterprises, and
technology-based ventures pursuant to Section 33 of this Code.
SECTION 38. Independent Directors. Any corporation with a class of equity
securities listed for trading on an Exchange or with assets in excess of Fifty million
pesos (P50,000,000.00) and having two hundred (200) or more holders, at least of two
hundred (200) of which are holding at least one hundred (100) shares of a class of its
equity securities or which has sold a class of equity securities to the public pursuant to
an effective registration statement in compliance with Section 12 hereof shall have at
least two (2) independent directors or such independent directors shall constitute at
least twenty percent (20%) of the members of such board, whichever is the lesser. For
this purpose, an "independent director" shall mean a person other than an of cer or
employee of the corporation, its parent or subsidiaries, or any other individual having a
relationship with the corporation, which would interfere with the exercise of
independent judgment in carrying out the responsibilities of a director. HCaIDS
CHAPTER X
Registration, Responsibilities and Oversight of Self-Regulatory Organizations
SECTION 39. Associations of Securities Brokers, and Dealers, and Other
Securities Related Organizations. 39.1. The Commission shall have the power to
register as a self-regulatory organization, or otherwise grant licenses, and to regulate,
supervise, examine, suspend or otherwise discontinue, as a condition for the operation
of organizations whose operations are related to or connected with the securities
market such as but not limited to associations of brokers and dealers, transfer agents,
custodians, scal and paying agents, computer services, news disseminating services,
proxy solicitors, statistical agencies, securities rating agencies, and securities
information processors which are engaged in the business of: (a) Collecting,
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processing, or preparing for distribution or publication, or assisting, participating in, or
coordinating the distribution or publication of, information with respect to transactions
in or quotations for any security; or (b) Distributing or publishing, whether by means of
a ticker tape, a communications network, a terminal display device, or otherwise, on a
current and continuing basis, information with respect to such transactions or
quotations. The Commission may prescribe rules and regulations which are necessary
or appropriate in the public interest or for the protection of investors to govern self-
regulatory organizations and other organizations licensed or regulated pursuant to the
authority granted in Subsection 39.1 including the requirement of cooperation within
and among, and electronic integration of the records of, all participants in the securities
market to ensure transparency and facilitate exchange of information. cCAaHD
40.3. (a) Each self-regulatory organization shall submit to the Commission for
prior approval any proposed rule or amendment thereto, together with a concise
statement of the reason and effect of the proposed amendment.
(b) Within sixty (60) days after submission of a proposed amendment, the
Commission shall, by order, approve the proposed amendment. Otherwise, the same
may be made effective by the self-regulatory organization.
(c) In the event of an emergency requiring action for the protection of investors,
the maintenance of fair and orderly markets, or the safeguarding of securities and
funds, a self-regulatory organization may put a proposed amendment into effect
summarily: Provided, however, That a copy of the same shall be immediately submitted
to the Commission.
40.4. The Commission is further authorized, if after making appropriate request
in writing to a self-regulatory organization that such organization effect on its own
behalf speci ed changes in its rules and practices and, after due notice and hearing it
determines that such changes have not been effected, and that such changes are
necessary, by rule or regulation or by order, may alter, abrogate or supplement the rules
of such self-regulatory organization in so far as necessary or appropriate to effect such
changes in respect of such matters as:
(a) Safeguards in respect of the nancial responsibility of members and
adequate provision against the evasion of nancial responsibility
through the use of corporate forms or special partnerships; TSaEcH
SECTION 42. Registration of Clearing Agencies. 42.1. Any clearing agency may
be registered as such with the Commission under the terms and conditions hereinafter
provided in this Section, by ling an application for registration in such form and
containing such information and supporting documents as the Commission by rule
shall prescribe, including the following:
(a) An undertaking to comply and enforce compliance by its participants
with the provisions of this Code, and any amendment thereto, and the
implementing rules or regulations made or to be made thereunder,
and the clearing agency's rules;
(b) The organizational charts of the Exchange, its rules of procedure, and a
list of its officers and participants;
(c) Copies of the clearing agency's rules.
42.2. No registration of a clearing agency shall be granted unless the rules of the
clearing agency include provision for:
(a) The expulsion, suspension, or disciplining of a participant for violations
of this Code, or any other Act administered by the Commission, the
rules, regulations, and orders thereunder, or the clearing agency's
rules; HCacTI
However, the Monetary Board may increase or decrease the above percentages,
in order to achieve the objectives of the Government with due regard for promotion of
the economy and prevention of the use of excessive credit.
Such rules and regulations may make appropriate provision with respect to the
carrying of undermargined accounts for limited periods and under speci ed conditions;
the withdrawal of funds or securities; the transfer of accounts from one lender to
another; special or different margin requirements for delayed deliveries, short sales,
arbitrage transactions, and securities to which letter (b) of the second paragraph of
this subsection does not apply; the bases and the methods to be used in calculating
loans, and margins and market prices; and similar administrative adjustments and
details.
48.2. No member of an Exchange or broker or dealer shall, directly or indirectly,
extend or maintain credit or arrange for the extension or maintenance of credit to or for
any customer:
(a) On any security unless such credit is extended and maintained in
accordance with the rules and regulations which the Commission
shall prescribe under this Section including rules setting credit in
relation to net capital of such member, broker or dealer; and
(b) Without collateral or on any collateral other than securities, except (i) to
maintain a credit initially extended in conformity with the rules and
regulations of the Commission and (ii) in cases where the extension
or maintenance of credit is not for the purpose of purchasing or
carrying securities or of evading or circumventing the provisions of
paragraph (a) of this subsection. cDCaTH
48.3. Any person not subject to Subsection 48.2 hereof shall extend or maintain
credit or arrange for the extension or maintenance of credit for the purpose of
purchasing or carrying any security, only in accordance with such rules and regulations
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as the Commission shall prescribe to prevent the excessive use of credit for the
purchasing or carrying of or trading in securities in circumvention of the other
provisions of this Section. Such rules and regulations may impose upon all loans made
for the purpose of purchasing or carrying securities limitations similar to those
imposed upon members, brokers, or dealers by Subsection 48.2 and the rules and
regulations thereunder. This subsection and the rules and regulations thereunder shall
not apply:
(a) To a credit extension made by a person not in the ordinary course of
business;
(b) To a loan to a dealer to aid in the nancing of the distribution of
securities to customers not through the medium of an Exchange; or
(c) To such other credit extension as the Commission shall exempt from the
operation of this subsection and the rules and regulations thereunder
upon specified terms and conditions or for stated period.cDTCIA
CHAPTER XIII
General Provisions
SECTION 51. Liabilities of Controlling Persons, Aider and Abettor and Other
Secondary Liability. 51.1. Every person who, by or through stock ownership, agency,
or otherwise, or in connection with an agreement or understanding with one or more
other persons, controls any person liable under this Code or the rules or regulations of
the Commission thereunder, shall also be liable jointly and severally with and to the
same extent as such controlled persons to any person to whom such controlled person
is liable, unless the controlling person proves that, despite the exercise of due diligence
on his part, he has no knowledge of the existence of the facts by reason of which the
liability of the controlled person is alleged to exist.
51.2. It shall be unlawful for any person, directly or indirectly, to do any act or
thing which it would be unlawful for such person to do under the provisions of this
Code or any rule or regulation thereunder.
51.3. It shall be unlawful for any director or of cer of, or any owner of any
securities issued by, any issuer required to le any document, report or other
information under this Code or any rule or regulation of the Commission thereunder,
without just cause, to hinder, delay or obstruct the making or ling of any such
document, report, or information.
51.4. It shall be unlawful for any person to aid, abet, counsel, command, induce or
procure any violation of this Code, or any rule, regulation or order of the Commission
thereunder. SEHDIC
51.5. Every person who substantially assists the act or omission of any person
primarily liable under Sections 57, 58, 59 and 60 of this Code, with knowledge or in
reckless disregard that such act or omission is wrongful, shall be jointly and severally
liable as an aider and abettor for damages resulting from the conduct of the person
primarily liable: Provided, however, That an aider and abettor shall be liable only to the
extent of his relative contribution in causing such damages in comparison to that of the
person primarily liable, or the extent to which the aider and abettor was unjustly
enriched thereby, whichever is greater.
SECTION 52. Accounts and Records, Reports, Examination of Exchanges,
Members, and Others. 52.1. Every registered Exchange, broker or dealer, transfer
agent, clearing agency, securities association, and other self-regulatory organization,
and every other person required to register under this Code, shall make, keep and
preserve for such periods, records, furnish such copies thereof, and make such reports,
as the Commission by its rules and regulations may prescribe. Such accounts,
correspondence, memoranda, papers, books, and other records shall be subject at any
time to such reasonable periodic, special or other examinations by representatives of
the Commission as the Commission may deem necessary or appropriate in the public
interest or for the protection of investors.
52.2. Any broker, dealer or other person extending credit, who is subject to the
rules and regulations prescribed by the Commission pursuant to this Code, shall make
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such reports to the Commission as may be necessary or appropriate to enable it to
perform the functions conferred upon it by this Code.
52.3. For purposes of this Section, the term "records" refers to accounts,
correspondence, memoranda, tapes, discs, papers, books and other documents or
transcribed information of any type, whether written or electronic in character. IDaEHS
(iv) In the case of a violation of Section 34, a ne of no more than three (3)
times the pro t gained or loss avoided as a result of the purchase,
sale or communication proscribed by such Section; and
(v) Other penalties within the power of the Commission to impose.
54.2. The imposition of the foregoing administrative sanctions shall be without
prejudice to the ling of criminal charges against the individuals responsible for the
violation.
54.3. The Commission shall have the power to issue writs of execution to
enforce the provisions of this Section and to enforce payment of the fees and other
dues collectible under this Code.
SECTION 55. Settlement Offers. 55.1. At any time, during an investigation or
proceeding under this Code, parties being investigated and/or charged may propose in
writing an offer of settlement with the Commission.
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55.2. Upon receipt of such offer of settlement, the Commission may consider the
offer based on timing, the nature of the investigation or proceeding, and the public
interest. IaAScD
55.3. The Commission may only agree to a settlement offer based on its ndings
that such settlement is in the public interest. Any agreement to settle shall have no legal
effect until publicly disclosed. Such decision may be made without a determination of
guilt on the part of the person making the offer.
55.4. The Commission shall adopt rules and procedures governing the ling,
review, withdrawal, form of rejection and acceptance of such offers.
SECTION 56. Civil Liabilities on Account of False Registration Statement. 56.1.
Any person acquiring a security, the registration statement of which or any part thereof
contains on its effectivity an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make such statements not
misleading, and who suffers damage, may sue and recover damages from the following
enumerated persons, unless it is proved that at the time of such acquisition he knew of
such untrue statement or omission:
(a) The issuer and every person who signed the registration statement;
(b) Every person who was a director of, or any other person performing
similar functions, or a partner in, the issuer at the time of the ling of
the registration statement or any part, supplement or amendment
thereof with respect to which his liability is asserted;
(c) Every person who is named in the registration statement as being or
about to become a director of, or a person performing similar
functions, or a partner in, the issuer and whose written consent
thereto is filed with the registration statement;
(d) Every auditor or auditing rm named as having certi ed any nancial
statements used in connection with the registration statement or
prospectus. HCacTI
(e) Every person who, with his written consent, which shall be led with the
registration statement, has been named as having prepared or
certi ed any part of the registration statement, or as having prepared
or certi ed any report or valuation which is used in connection with
the registration statement, with respect to the statement, report, or
valuation, which purports to have been prepared or certified by him.
(f) Every selling shareholder who contributed to and certi ed as to the
accuracy of a portion of the registration statement, with respect to
that portion of the registration statement which purports to have
been contributed by him.
(g) Every underwriter with respect to such security.
56.2. If the person who acquired the security did so after the issuer has made
generally available to its security holders an income statement covering a period of at
least twelve (12) months beginning from the effective date of the registration
statement, then the right of recovery under this subsection shall be conditioned on
proof that such person acquired the security relying upon such untrue statement in the
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registration statement or relying upon the registration statement and not knowing of
such income statement, but such reliance may be established without proof of the
reading of the registration statement by such person. DcITHE
SECTION 59. Civil Liability for Manipulation of Security Prices. Any person who
willfully participates in any act or transaction in violation of Section 24 shall be liable to
any person who shall purchase or sell any security at a price which was affected by
such act or transaction, and the person so injured may sue to recover the damages
sustained as a result of such act or transaction.
SECTION 60. Civil Liability with Respect to Commodity Futures Contracts and
Pre-need Plans. 60.1. Any person who engages in any act or transaction in willful
violation of any rule or regulation promulgated by the Commission under Section 11 or
16, which the Commission denominates at the time of issuance as intended to prohibit
fraud in the offer and sale of pre-need plans or to prohibit fraud, manipulation, ctitious
transactions, undue speculation, or other unfair or abusive practices with respect to
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commodity future contracts, shall be liable to any other person sustaining damage as a
result of such act or transaction.
60.2. As to each such rule or regulation so denominated, the Commission by rule
shall prescribe the elements of proof required for recovery and any limitations on the
amount of damages that may be imposed.
SECTION 61. Civil Liability on Account of Insider Trading . 61.1. Any insider who
violates Subsection 27.1 and any person in the case of a tender offer who violates
Subsection 27.4 (a)(i), or any rule or regulation thereunder, by purchasing or selling a
security while in possession of material information not generally available to the
public, shall be liable in a suit brought by any investor who, contemporaneously with the
purchase or sale of securities that is the subject of the violation, purchased or sold
securities of the same class unless such insider, or such person in the case of a tender
offer, proves that such investor knew the information or would have purchased or sold
at the same price regardless of disclosure of the information to him.
61.2. An insider who violates Subsection 27.3 or any person in the case of a
tender offer who violates Subsection 27.4 (a), or any rule or regulation thereunder, by
communicating material nonpublic information, shall be jointly and severally liable
under Subsection 61.1 with, and to the same extent as, the insider, or person in the case
of a tender offer, to whom the communication was directed and who is liable under
Subsection 61.1 by reason of his purchase or sale of a security. CcTIAH
The Court is also authorized to award attorney's fees not exceeding thirty
percentum (30%) of the award.
63.2. The persons speci ed in Sections 56, 57, 58, 59, 60 and 61 hereof shall be
jointly and severally liable for the payment of damages. However, any person who
becomes liable for the payment of such damages may recover contribution from any
other person who, if sued separately, would have been liable to make the same
payment, unless the former was guilty of fraudulent representation and the latter was
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not.
63.3. Notwithstanding any provision of law to the contrary, all persons, including
the issuer, held liable under the provisions of Sections 56, 57, 58, 59, 60 and 61 shall
contribute equally to the total liability adjudged herein. In no case shall the principal
stockholders, directors and other of cers of the issuer or persons occupying similar
positions therein, recover their contribution to the liability from the issuer. However, the
right of the issuer to recover from the guilty parties the amount it has contributed under
this Section shall not be prejudiced.
SECTION 64. Cease and Desist Order. 64.1. The Commission, after proper
investigation or veri cation, motu proprio, or upon veri ed complaint by any aggrieved
party, may issue a cease and desist order without the necessity of a prior hearing if in
its judgment the act or practice, unless restrained, will operate as a fraud on investors
or is otherwise likely to cause grave or irreparable injury or prejudice to the investing
public.
64.2. Until the Commission issues a cease and desist order, the fact that an
investigation has been initiated or that a complaint has been led, including the
contents of the complaint, shall be con dential. Upon issuance of a cease and desist
order, the Commission shall make public such order and a copy thereof shall be
immediately furnished to each person subject to the order.
64.3. Any person against whom a cease and desist order was issued may, within
ve (5) days from receipt of the order, le a formal request for a lifting thereof. Said
request shall be set for hearing by the Commission not later than fteen (15) days from
its ling and the resolution thereof shall be made not later than ten (10) days from the
termination of the hearing. If the Commission fails to resolve the request within the
time herein prescribed, the cease and desist order shall automatically be lifted.
SECTION 65. Substituted Service Upon the Commission. Service of summons
or other process shall be made upon the Commission in actions or legal proceedings
against an issuer or any person liable under this Code who is not domiciled in the
Philippines. Upon receipt by the Commission of such summons, the Commission shall
within ten (10) days thereafter, transmit by registered mail a copy of such summons
and the complaint or other legal process to such issuer or person at his last known
address or principal of ce. The sending thereof by the Commission, the expenses for
which shall be advanced by the party at whose instance it is made, shall complete such
service.
SECTION 66. Revelation of Information Filed with the Commission. 66.1. All
information led with the Commission in compliance with the requirements of this
Code shall be made available to any member of the general public, upon request, in the
premises and during regular of ce hours of the Commission, except as set forth in this
Section. AcISTE
Failure on the part of the Commission to issue rules and regulations shall not in
any manner affect the self-executory nature of this Code.
72.2. The Commission shall promulgate rules and regulations providing for
reporting, disclosure and the prevention of fraudulent, deceptive or manipulative
practices in connection with the purchase by an issuer, by tender offer or otherwise, of
and equity security of a class issued by it that satis es the requirements of Subsection
17.2. Such rules and regulations may require such issuer to provide holders of equity
securities of such dates with such information relating to the reasons for such
purchase, the source of funds, the number of shares to be purchased, the price to be
paid for such securities, the method of purchase and such additional information as the
Commission deems necessary or appropriate in the public interest or for the protection
of investors, or which the Commission deems to be material to a determination by
holders whether such security should be sold.
72.3. For the purpose of Subsection 72.2, a purchase by or for the issuer or any
person controlling, controlled by, or under common control with the issuer, or a
purchase subject to the control of the issuer or any such person, shall be deemed to be
a purchased by the issuer. The Commission shall have the power to make rules and
regulations implementing this subsection, including exemptive rules and regulations
covering situations in which the Commission deems it unnecessary or inappropriate
that a purchase of the type described in this subsection shall be deemed to be a
purchase by the issuer for the purpose of some or all of the provisions of Subsection
72.2.
72.4. The rules and regulations promulgated by the Commission shall be
published in two (2) newspapers of general circulation in the Philippines, and unless
otherwise prescribed by the Commission, the same shall be effective fteen (15) days
after the date of the last publication.
SECTION 73. Penalties. Any person who violates any of the provisions of this
Code, or the rules and regulations promulgated by the Commission under authority
thereof, or any person who, in a registration statement led under this Code, makes any
untrue statement of a material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, shall, upon
conviction, suffer a ne of not less than Fifty thousand pesos (P50,000.00) nor more
than Five million pesos (P5,000,000.00) or imprisonment of not less than seven (7)
years nor more than twenty-one (21) years, or both in the discretion of the court. If the
offender is a corporation, partnership or association or other juridical entity, the penalty
may in the discretion of the court be imposed upon such juridical entity and upon the
of cer or of cers of the corporation, partnership, association or entity responsible for
the violation, and if such of cer is an alien, he shall in addition to the penalties
prescribed, be deported without further proceedings after service of sentence. DcSACE
The use of such additional amount shall be subject to the auditing requirements,
standards and procedures under existing laws.
SECTION 76. Repealing Clause. The Revised Securities Act (Batas Pambansa
Blg. 178), as amended, in its entirety, and Sections 2, 4 and 8 of Presidential Decree
902-A, as amended, are hereby repealed. All other laws, orders, rules and regulations, or
parts thereof, inconsistent with any provision of this Code are hereby repealed or
modified accordingly.
SECTION 77. Separability Clause. If any portion or provision of this Code is
declared unconstitutional or invalid, the other portions or provisions hereof, which are
not affected thereby shall continue in full force and effect.
SECTION 78. Effectivity. This Code shall take effect fteen (15) days after its
publication in the Official Gazette or in two (2) newspapers of general circulation.ISTDAH