The Securities Regulation Code of the Philippines

For investors, equity securities like shares of stock of a corporation and debt securities like bonds, banknotes, and debentures can be good investing opportunities to earn profit and increase their wealth. For companies, those securities can be used to encourage more injection of money or capital into their businesses. And for our government, the trading of securities in the market requires regulation that will ensure the protection of everyone who participates on it. That is why Republic Act No. 8799, known as The Securities Regulation Code of the Philippines was enacted and approved on July 19, 2000.

The purposes of the Securities Regulation Code

According to Section 2 of the Securities Regulation Code of the Philippines, this law was enacted for the following purposes:

1. To establish a socially conscious, free market that regulates itself
2. To encourage the widest participation of ownership in enterprises
3. To enhance the democratization of wealth
4. To promote the development of the capital market
5. To protect investors
6. To ensure full and fair disclosure about securities
7. To minimize if not totally eliminate insider trading and other fraudulent or manipulative devices and practices which create distortions in the free market.

Some highlights of the law

The Securities Regulation Code of the Philippines has 78 sections which are categorized into 13 chapters. In chapter one, the Act gives definitions on some of the terms related to securities, including securities themselves. In chapter two, the Act outlines the powers and functions of the Securities and Exchange Commission (SEC) or the “commission” with regard to the regulation of the securities in the Philippines.

The requirements and procedures in the registration of securities in the Philippines are discussed in Chapter three of the code. Remember that, generally, securities should not be sold or offered for sale or distribution within the Philippines, without a registration statement duly filed with and approved by the Commission, except however for the classes of securities enumerated in Section 9.1 of the code and the exempt transactions enumerated in Section 10.1 of the code, as amended.

As a regulation, the code sets out reportorial requirements (including financial statements) for issuers of securities listed in Section 17.2 of the code, as amended. Measures to protect investors, prohibit fraud, regulate securities professionals, and to ensure that the Philippine securities market system is effective and in order, are included in the Act. Check out the following outline of the Philippine Securities Regulation Code. You may also get the copy of the full text or PDF file of the code below.

Outline of the Securities Regulation Code

Chapter I – Title and Definitions
Chapter II – Securities and Exchange Commission
Chapter III – Registration of Securities
Chapter IV – Regulation of Pre-Need Plans
Chapter V – Reportorial Requirements
Chapter VI – Protection of Shareholder Interests
Chapter VII – Prohibitions on Fraud, Manipulation and Insider Trading
Chapter VIII – Regulation of Securities Market Professionals
Chapter IX – Exchanges and Other Securities Trading Markets
Chapter X – Registration, Responsibilities and Oversight of Self-Regulatory Organizations
Chapter XI – Acquisition and Transfer of Securities and Settlement of Transactions in Securities
Chapter XII – Margin and Credit
Chapter XIII – General Provisions

Full text of the Securities Regulation Code

To download a PDF file copy and read the full text of the Republic Act No. 8799 or the Securities Regulation Code of the Philippines, please visit the link.

Implementing rules and regulations

The revised “SRC Rule” or the Implementing Rules and Regulations of the Securities Regulation Code of 2000 that aims to effectively and efficiently implement the code can be viewed here. SRC Rule 68.1, as amended, is the special rule on financial statement of reporting companies under section 17.2 of the Securities Regulation Code.

Remember that this post is for general information use only. Subsequent amendments on laws, regulations, and issuances by the Commission may render the information on this page obsolete in part or in whole. For more information about securities in the Philippines, please visit the Philippine Securities and Exchange Commission website at www.sec.gov.ph .