Question & AnswerQ&A (Commonwealth Act No. 83)
The short title of Commonwealth Act No. 83 is the "Securities Act."
Securities include stock certificates, bonds, debentures, certificates of participation or rights to subscribe, investment contracts, and various other instruments evidencing interest or ownership, including promissory notes accompanied by profits-sharing promises, among others.
Speculative securities are those advertised or sold with promises of unusual profit, whose value depends largely on future promotion rather than tangible assets, or securities involving speculative profit or loss, including securities involving intangible assets or mineral properties.
Dealers include all persons engaging in selling securities issued by others or trading securities for profit, excluding those without a place of business selling exclusively to other brokers or dealers.
The SEC enforces provisions of the Act, registers securities, regulates brokers, dealers and salesmen, investigates violations, issues licenses, and adopts rules and regulations for the protection of investors.
Exempt securities include those already sold prior to the Act's effect, government-issued or guaranteed securities, certain banking securities, insurance policies, securities issued in bona fide reorganizations, among others, subject to specific conditions.
Transactions such as judicial sales, isolated transactions by owners not engaged in repeated sales, certain stock dividends, exchanges in bona fide reorganizations, and transfers to banks or brokers engaged in business, among others, are exempt.
Information such as name of issuer, location, names of directors and officers, character of business, capitalization, copies of security, financial statements, commission details, use of proceeds, and related corporate documents must be included.
Violation can result in imprisonment for up to two years, a fine of up to twenty thousand pesos, or both; for exchanges, the fine can be up to one hundred thousand pesos.
Such sales are voidable at the purchaser's election, and the seller and participating officers or agents are jointly and severally liable for refund with interest, court costs, and attorney's fees, provided the purchaser acts within two years of the sale.
Yes, the Commission may revoke registration or licenses if the issuer is insolvent, engaged in fraudulent transactions, has bad business repute, violated the Act, or has unsound business principles, among other grounds.
They must file an application verified by oath, showing business details, good repute, and file a bond or security; registration is renewed annually with payment of fees.
Such conditions or waivers in contracts are void and any contract involving violation of the Act is void as to the rights of any party involved or acquiring interest with knowledge of the violation.
Yes, any person owning more than ten percent of a class of security or serving as director or officer must file statements of ownership with the exchange and Commission periodically.