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Securities regulation code

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SECURITIES REGULATION CODE (RA 8799)
SECURITIES AND EXCHANGE COMMISSION
- Protection and supervision of juridical entities
- Consists of a Chairperson + 4 Commissioners
- 4 principal departments:
o Markets and Securities Regulation
o Corporate Governance and Finance
o Company Registration and Monitoring
o Enforcement and Investor Protection
SECURITIES REQUIRED TO BE REGISTERED
Shares of stocks
Bonds, debentures, notes, evidences of
indebtedness, asset-backed securities
Investment contracts, certificates of interest or
participation in a profit-sharing agreement,
certifies of deposit for a future subscription;
Fractional undivided interests in oil, gas or other
mineral rights
Derivatives like option and warrants
Certificates of assignments, certificates of
participation, trust certificates, voting trust
certificates or similar instruments
Proprietary or nonproprietary membership
certificates in corporations; and
Other instrument as maybe determined by SEC
EXEMPTED SECURITIES FROM REGISTRATION
× Those issued by the Government of PH or of
any country (observe reciprocity clause)
× Certificates issued by a receiver/trustee in
bankruptcy
× Those under supervision and regulation of
Office of the Insurance Commission or BIR
× Those issued by a bank except its own shares
× Ordinary deeds of instruments (contract of
lease, sale or real estate mortgage)
REGISTRATION REQUIREMENTS
FEE: < 1/10 of 1% securities maximum offer price
APPROVAL PERIOD: 45 days upon filing
GROUND FOR REJECTION OR REVOCATION OF
SECURITIES REGISTRATION
1) Issuer:
o Has been judicially declared insolvent
o Violated any provision of the Code
o Been engaged or about to engage fraud
o Made any false or misleading representation of
material facts
o Failed to comply with SEC requirements
2) Registration statement is incomplete on its face or
includes any untrue statements
3) Issuer has been convicted by competent judicial or
administrative body upon plea of guilty of an offense
involving moral turpitude or fraud
PROTECTION OF SHAREHOLDERS INTEREST
A. TENDER OFFER publicly announced intention by a
person acting alone or in concert with other persons to
acquire outstanding equity securities of a public company

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Tender offer by an issuer (buy-back)
o If issuer has unrestricted RE
o Undertaken for the ff purposes:
- Implement stock option/purchase plan
- Meet short-term obligations
- Pay dissenting or withdrawing
shareholders entitled to payment
Expiration period of a tender offer
o 20 business days from commencement; offer
must be completed within 60 business days
from date intention to make offer
o 10 business days from date notice of a change
in percentage of securities is first published
Prohibited acts in any tender offer
× To employ device or scheme to defraud anyone
× To make any untrue statement of material fact
× To engage in act w/c operates as fraud or deceit
B. INSIDER TRADING
- it shall be unlawful for an insider to buy/sell securities of
issuer while in possession of material information that is
not generally available yet to the public unless:
o Insider proves information was not gained from
such relationship
o If other party selling to/buying from insider is
identified, insider proves:
- That he disclosed info to other party
- He had reason to believe that other
party is also in possession of the info
CORPORATE GOVERNANCE
- framework of rules in a corporation that governs
performance by BOD and management of their duties
Companies covered
Those that sell equity or debt securities required
to be registered with SEC
Those that have assets > 50M and at least 200
shareholders who own at least 100 shares each
Whose equity securities are listed in stock
exchanges
Those grantees of secondary SEC licenses
Establishment of Audit Committee
- The committee shall assist the Board in performance of
its oversight responsibility for financial reporting process
- Consist of at least 3 directors, who preferably have
accounting and financing background, one of whom shall
be an independent director and another with audit
experience
Appointment of Compliance Officer
- appointed by the Board who shall report directly to
Chairman of the Board

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SECURITIES REGULATION CODE (RA 8799) × SECURITIES AND EXCHANGE COMMISSION Protection and supervision of juridical entities Consists of a Chairperson + 4 Commissioners 4 principal departments: o Markets and Securities Regulation o Corporate Governance and Finance o Company Registration and Monitoring o Enforcement and Investor Protection × SECURITIES REQUIRED TO BE REGISTERED ✓ Shares of stocks ✓ Bonds, debentures, notes, evidences of indebtedness, asset-backed securities ✓ Investment contracts, certificates of interest or participation in a profit-sharing agreement, certifies of deposit for a future subscription; ✓ Fractional undivided interests in oil, gas or other mineral rights ✓ Derivatives like option and warrants ✓ Certificates of assignments, certificates of participation, trust certificates, voting trust certificates or similar instruments ✓ Proprietary or non ...
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