Title
Source: Supreme Court
Philippine Securities Regulation Code
Law
Republic Act No. 8799
Decision Date
Jul 19, 2000
The Securities Regulation Code is a Philippine law that regulates the securities industry, imposing penalties for violations, providing transitory provisions, and repealing previous laws, with fines, imprisonment, and deportation as potential consequences for offenders.

Q&A (Republic Act No. 8799)

Republic Act No. 8799 is entitled "The Securities Regulation Code."

The state policy is to establish a socially conscious, free market that regulates itself, encourages the widest participation of ownership in enterprises, enhances the democratization of wealth, promotes the development of the capital market, protects investors, ensures full and fair disclosure about securities, and minimizes or eliminates insider trading and other fraudulent or manipulative devices and practices that distort the free market.

Securities are shares, participation or interests in a corporation or in a commercial enterprise or profit-making venture and evidenced by a certificate, contract, instrument, whether written or electronic. It includes shares of stock, bonds, notes, evidences of indebtedness, investment contracts, certificates of deposit for future subscription, derivatives like options and warrants, trust certificates, membership certificates in corporations, among others.

It is administered by the Securities and Exchange Commission (SEC), a collegial body composed of a Chairperson and four Commissioners appointed by the President for seven-year terms.

Commissioners must be natural-born Philippine citizens, with the Chairperson at least 40 years old and Commissioners at least 35 years old. They must be of good moral character, unquestionable integrity, known probity and patriotism, and have recognized competence in social and economic disciplines. The majority must be members of the Philippine Bar.

Securities shall not be sold or offered for sale in the Philippines without a registration statement duly filed with and approved by the SEC. Information must be made available to prospective purchasers.

Exempt transactions include judicial sales, isolated transactions not part of repeated sales, distributions by corporations as stock dividends, sales to qualified buyers like banks, insurance companies, and certain small private offerings among others.

Insiders are prohibited from buying or selling securities while in possession of material nonpublic information unless certain conditions apply. It is also unlawful to communicate such information to others for trading purposes.

Sanctions include suspension or revocation of registrations, fines ranging from P10,000 to P1,000,000 plus daily penalties, disqualification from certain positions, and other penalties within the SEC's power. These are without prejudice to filing criminal charges.

Persons who acquired securities with untrue statements or omissions in registration statements may recover damages from issuers, directors, auditors, selling shareholders, and underwriters unless the acquirer knew of the untrue statement at the time of acquisition.


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