Philippine Securities Regulation Code

Detailed definitions include securities, issuer, broker, dealer, insider, pre-need plans, promoter, prospectus, registration statement, salesman, uncertificated securities, underwriter, among others.
Securities cover stocks, bonds, investment contracts, derivatives, membership certificates, and future instruments.
Insider defined broadly including issuer, directors, officers, controlling persons, government employees with access to material non-public information.

SEC is the administering body, composed of a chairperson and four commissioners appointed for 7-year terms.
Commissioners must be natural-born Filipinos with integrity, competence, and certain age and bar membership qualifications.
Chairperson is the chief executive officer with administrative and executive functions.
Commissioners' indemnification and liability outlined; penalties for gross negligence and malfeasance noted.

Jurisdiction over corporations and securities market, including registration approval, supervision, investigation, and rule-making.
Authority to issue cease and desist orders, sanctions, conduct hearings, and compel production of documents.
Ability to delegate functions and enlist government or private enforcement aid.
Some cases transferred to Regional Trial Courts while retaining jurisdiction over some intra-corporate disputes and pending rehabilitation cases.

Mandatory registration of securities before public offer or sale, subject to SEC approval.
Registration statement requires full disclosure including financial impact on ownership.
Exempt securities include government-issued securities, certain certificates, and bank securities.
Exempt transactions include judicial sales, isolated transactions by owners, stock dividends, sales to fewer than 20 persons, and to qualified buyers.
SEC may audit financials for registration.
Registration process includes fees and publicity of filing, effectiveness determination within 45 days with possible conditional approvals.
Registration may be rejected or revoked for insolvency, fraud, false statements, or failure to comply with rules.

Pre-need plans involve contracts for future service/benefit payments.
Sale of such plans regulated by the SEC with registration, disclosure, licensing, financial requirements, and trust funds.

Issuers must file annual and periodic reports including audited financial statements.
Reporting applies to companies with registered securities, listed equities, or assets and holders above prescribed thresholds.
Copies of reports filed with the Exchange if securities are listed.

Persons acquiring beneficial ownership of more than 5% must file disclosure statements with issuer, Exchange, and SEC.
Changes in prior disclosed ownership must be amended.
Insiders prohibited from trading on material nonpublic information; disclosure and communication duties outlined.

Persons acquiring 15% or more (or 30% over 12 months) in specified companies must make tender offers with full disclosure.
Proxy solicitations are regulated, require written form, and must be filed.

Illegal to manipulate security prices, engage in deceptive practices, disseminate false information, or perform manipulative transactions.
Option trading restrictions include prohibition on guarantee of performance.
Fraudulent acts in securities transactions prohibited.

Brokers, dealers, salesmen, and associated persons must be registered with the SEC.
Registration includes examination, net capital requirements, and consent for service of process.
Registration may be denied, suspended, or revoked for violations or failure to meet qualifications.

Use of unregistered exchanges or OTC markets forbidden.
Exchanges must be registered and meet organizational, ownership, governance, transparency, and investor protection criteria.
Exchange members restricted from trading for own account with exceptions.
Exchanges pay registration and additional fees and are subject to SEC oversight including suspension of trading.

SEC powers to regulate securities-related organizations including broker associations and clearing agencies.
SROs enforce compliance with laws and rules, discipline members, and submit rules for SEC approval.

Clearing agencies must be registered to handle settlement by book-entry.
Corporations permitted to issue uncertificated securities, enabling electronic transfer and robust record-keeping.
Official clearing records are best evidence in disputes.

SEC prescribes credit limits on securities purchase to prevent excessive leverage.
Brokers and members must maintain margin and credit within rules.

Controlling persons and aider-abettors held jointly liable.
SEC investigates violations, issues cease and desist orders, and can impose administrative sanctions.
Settlement offers permitted subject to SEC approval.
Civil liabilities for false statements, fraud, manipulation, insider trading, and other securities law violations detailed with remedies and damages.

Confidentiality rules regarding information filed with the SEC; exceptions for public interest and foreign enforcement cooperation.
Actions of the SEC do not imply approval or endorsement of securities.
Accounting rules may be set by the SEC.
Judicial review of SEC orders allowed by appeal to the Court of Appeals.
Contracts violating the Code are void.
The Code is self-executing with powers for the SEC to issue implementing regulations.
Penal sanctions include fines, imprisonment, and deportation for violations.
Repealing clauses remove conflicting laws; provisions for transition and effectivity established.