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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City. Philippines

Seventeenth Congress
Third Regular Session

House Bill No. band

Introduced by REP. “KUYA” JOSE ANTONIO R. SY-ALVARADO

EXPLANATORY NOTE

The Republic Act 8799 otherwise known as the Securities Regulation Code was establish
to promote a socially conscious, free market that regulates itself, encourage the widest
participation of ownership in enterprises, enhance the democratization of wealth, promote the
development of the capital market, protect investors, ensure full and fair disclosure about
securities, minimize if not totally eliminate insider trading and other fraudulent or manipulative
devices and practices which create distortions in the free market.

The Securities and Exchange Commission (SEC) or the Commission is the national
government agency charged with supervision over the corporate sector, the capital market
participants, the securities and investment instruments market, and the investing public.
However, due to the number of corporations or association that is under the jurisdiction and the
power of the SEC, it is inevitable that such legal fiction can be used to defraud the investing
public. With these, the SEC has the obligation to check whether the laws involving securities
transactions are in harmony with existing laws and in line with the international standards.

The growing complexities of these transactions demand the need of amending the
dated provisions of the Securities Regulation Code. These amendments included in this B
bolster the power of the SEC to effectively enforce its rules and regulations and rei
service efficiently.

Hence, the immediate passage of this Bill is earnestly sought.
“KUYA” JOSE ANTONIO R. SY-ALVARADO

Representative
First District of Bulacan


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Philippines

Seventeenth Congress
Third Regular Session

House Bill No. 8424
Introduced by REP. “KUYA” JOSE ANTONIO R. SY-ALVARADO

AN ACT
AMENDING REPUBLIC ACT NO. 8799 (R.A. 8799), OTHERWISE KNOWN AS.
THE SECURITIES REGULATION CODE
Be it enacted by the Senate and House of Representatives of the Philippines in
Congress assembled:

SECTION 1. Section 2 of the Code is hereby amended to read as follows: "Sec.
2.Declaration of State Policy - The State shall establish a socially conscious, free market
that regulates itself, encourage the widest participation of ownership in enterprises
enhance the democratization of wealth, promote the development +AND
COMPETITIVENESS of the capital market, protect investors, ensure full and fair
disclosure about securities, minimize if not totally eliminate insider trading and other
fraudulent or manipulative devices and practices which create distortions in the free
market.

SECTION 2. Section 3 of the Code is hereby amended to read as follows: "Sec. 3.
Definition of Terms. - 3.1. "Securities" are shares or participation or interests in a
corporation (or in a), commercial enterprise [.] or profit-making venture (and); OR
ISSUANCES evidenced by a certificate, contract, instrument, whether written or
electronic in character. It includes:

(a) Shares of stock, bonds, debentures, notes, ANDOTHER evidence[s] of
indebtedness (asset-backed securities);

(b)Investment contracts, certificates of interest or participation in a profit sharing
agreement (certificates of deposit for a future subscription):

(c) Fractional undivided interests in oil, gas or other mineral rights

(d) Derivatives like options, ASSET-BACKED SECURITIES and warrants;


(e) Certificates of assignment[s], certificates of participation, trust certificates, [voting
trust certificates] or similar instruments; Proprietary or nonproprietary membership certificates in
corporations; and

() Other instruments as may in the future be determined by the Commission. 3.3.
"Broker" is a person engaged in the business of [buying and selling] effecting transactions in
securities for the account of others.

3.5. "DOCUMENTS/RECORDS" SHALL INCLUDE PAPERS, FILES, RECORDS,
TAX RETURNS, FINANCIAL STATEMENTS, BOOKS OF ACCOUNT, AS WELL AS ALL
RELATED ACCOUNTS, CORRESPONDENCES, MEMORANDA, IN WHATEVER FORM,
INCLUDING BUT NOT LIMITED TO, TRANSACTIONS, INVESTMENTS, ASSETS,
SECURITIES, COMMODITIES AND DERIVATIVES, PAYMENT, CLEARING AND
SETTLEMENT OR ANY OTHER SIMILAR DOCUMENT THAT THE COMMISSION MAY
REQUIRE IN THE EXERCISE OF ITS POWERS AND FUNCTIONS AS PROVIDED BY
LAW. (n)

3.5.13.6." Associated person of a broker or dealer is [an](a) any employee [thereof] of a
broker or dealer who directly or indirectly exercises control (oflor supervisory authority butJover
any of the activities or personnel of such broker or dealer, (b) any person directly or indirectly
controlling, controlled by, or under common control with such broker or dealer. This definition
shall [does] not include a salesman, for] an agent, or any person associated with a broker or
dealer whose functions are solely clerical or ministerial

3.63.7. Clearing agency” is any means any person who acts as an intermediary in
making{deliveries upon payments to effect settlement in securities transactionsJor deliveries or
both in connection with transactions in securities or who provides facilities:(a) for comparison of
data.

Respecting the terms of settlement of securities transactions, (b) to reduce the number of
settlements of securities transactions, or (c) for the allocation of securities settlement
responsibilities. such term also means any person, such as a securities depository, who () acts as a
custodian of securities in connection with a system for the central handling of securities whereby
all securities of a particular class or series of any issuer deposited within the system are treated as
fungible and may be transferred, loaned, or pledged by bookkeeping entry with or without
physical delivery of securities certificates, or (11) otherwise permits or facilitates the settlement
of securities transactions or the hypothecation or lending of securities with or without physical
delivery of securities certificates.

3.8. "commodity futures contract is a contract that provides for the making or taking
delivery, at a prescribed time in the future, of a commodity, or its cash or equivalent tangible
value.

[3.7] 3.9. "Exchange" is an organized marketplace or facility that brings together buyers
and sellers and executes trades of securities and/or commodities.

3 8.13.10. Insider means: The issue IBLA PERSON CONTROLLING THE ISSUER; A
director or officer (or person performing similar functions) of the issuer, or the person controlling
the issuer, a person whose relationship or former relationship to the issuer gives or gave him


access to material information about the issuer or the security that is not generally available to the
public; a government employee, or director, or officer of an exchange, clearing agency and/or
self-regulatory organization who has access to material information about an issuer or a security
that is not generally available to the public; a person who learns such information by a
communication from any of the foregoing insiders

A person whose relationship or former relationship to any of those in (a) to (f) above
gives or gave him access to material information about the issuer or the security that is not
generally available to the publie;(h) a tipper; or (1) a dummy as defined in c.a. no. 108, the anti-
dummy act.

3.11."PERSON" MEANS NATURAL OR JURIDICAL, WHETHER OR NOT
REGISTERED WITH THE COMMISSION.

3.9. "Pre-need plans" are contracts which provide for the performance of future services
or the payment of future monetary considerations at the time of actual need, for which plan
holders pay in cash or installment at stated prices, with or without interest or insurance coverage
and includes life, pension, education, interment, and other plans which the Commission may
from time to time approve]

[3.10.13.12. "Promoter is a person who, acting alone or with others, takes initiative in
founding and organizing the business or enterprise of the issuer and receives consideration
therefor.

[3.11] 3.13."Prospectus” is the document made by or on behalf of an issuer, underwriter
or dealer to sell or offer securities for sale to the public through a registration statement filed OR
RENDERED EFFECTIVE BY the Commission

[3.12]3.14."Registration Statement" is the application for the registration of securities
COMPOSED OF A PROSPECTUS AND OTHER DOCUMENTS AS MAY BE required [to be
filed with] BY the Commission.

[3.13]3.15." Salesman" is a natural person, employed as such or as an agent, by a dealer,
issuer or broker to buy and sell securities.

[3.14]3.16."Uncertificated security is a security evidenced by electronic or similar
records.

[3.151 3.17.“Underwriter is a person who guarantees on a firm commitment and/or
declared best effort basis the distribution and sale of securities (of any kind) issued by another

[company] corporation
SECTION 3. Section 4 of the Code is hereby amended to read as follows
"Sec. 4. Administrative Agency. - 4.1. This code shall be administered by the Securities
and Exchange Commission (hereinafter referred to as the "Commission") as a collegial body,

‘composed of a Chairperson and four (4) Commissioners, appointed by the President for a FIXED
term of seven (7) years each and who shall serve as such until THE EXPIRATION OF THEIR


TERM AND their successor shall have been appointed and qualified, OR UPON THEIR
RESIGNATION.

4.3 THE COMMISSIONERS SHALL, IN THE COURSE OF THE PERFORMANCE
OF THEIR OFFICIAL DUTIES, ACT INDEPENDENTLY AND WITHOUT INFLUENCE
FROM ANY PERSON OR ENTITY.

[4.3.14.4. The Chairperson is the chief executive officer of the Commission. The
Chairperson shall execute and administer the policies, decisions, orders and resolutions approved
by the
Commission and shall have the general executive direction and supervision of the work and
operation of the Commission and of its members, bodies, boards, offices, personnel and all its
administrative bodies. IN CASE OF DEATH, PERMANENT DISABILITY, OR
RESIGNATION, THE MOST SENIOR COMMISSIONER SHALL ACT AS THE
CHAIRPERSON IN AN OFFICER-IN-CHARGE CAPACITY.

[4.4.]4.5. The salary of the Chairperson and the Commissioners shall be fixed by the
President of the Philippines based on an objective classification system, at a sum comparable to
the members of the Monetary Board and commensurate to the importance and responsibilities
attached to the position, WHICH SHALL BE REVIEWED WITH THE SAME FREQUENCY
AS THAT OF THE MEMBERS OF THE MONETARY BOARD.

[4.514.6. The Commission shall hold meetings at least once a week for the conduct of
business or as often as may be necessary upon call of the Chairperson or upon the request of three
(3) Commissioners WHICH MEETINGS MAY BE HELD THROUGH REMOTE
COMMUNICATION. The notice of the meeting shall be given to all Commissioners and the
presence of three (3) Commissioners shall constitute a quorum. FOR THE CONTINUITY OF
WORK AND TO AVOID UNNECESSARY DELAYS IN CASE OF LACK OF QUORUM
DUE TO UNAVAILABILITY OF REMOTE COMMUNICATION, DEATH, PERMANENT
DISABILITY OR RESIGNATION, ANY TWO (2) DIRECTORS FROM ANY OF THE
DEPARTMENTS OR OFFICES OF THE COMMISSION, WHEN SO REQUIRED BY THE
CHAIRPERSON OR BY ANY COMMISSIONER, MAY TAKE THE PLACE OF ONE (1)
COMMISSIONER AT A MEETING, AND THEIR PRESENCE, TOGETHER WITH THAT OF
AT LEAST TWO (2) OTHER COMMISSIONERS SHALL ALSO CONSTITUTE A
QUORUM [in the absence of the Chairperson, the most senior Commissioner shall act as
presiding officer of the meeting]”

SECTION 4. Section 5 of the Code is hereby amended to read as follows:

"Sec. 5. Powers and Functions of the Commission. — 5.1. The Commission shall act with
transparency and shall have the powers and functions provided by this Code, Presidential Decree
No. 902-A, the Corporation Code, the Investment Houses Law, the Financing Company Act and
other existing laws. Pursuant thereto the Commission shall have, among others, the following
powers and functions:

(a) Have jurisdiction and supervision over all corporations, partnerships or associations
who are the grantees of primary franchises and/or a license or permit issued by the Government;

(b) Formulate policies and recommendations on issues SUCH AS BUT NOT LIMITED
TO CORPORATE GOVERNANCE, CAPITAL MARKET DEVELOPMENT, AND MARKET


AND SECURITIES REGULATION, concerming the securities market, advise Congress and
other government agencies on all aspects of the securities market and propose legislation and
amendments THEREON|thereto};

(c) Approve, reject, suspend, revoke or require amendments to registration statements,
and registration and licensing applications;

(@ Regulates, investigate orJAND supervise the activities of persons to ensure
compliance WITH THIS CODE AND OTHER APPLICABLE LAWS, AND INVESTIGATE
ALL POTENTIAL VIOLATIONS OF THIS CODE AND OTHER APPLICABLE LAWS
COMMITTED BY PERSONS, OR UPON REQUEST FOR INFORMATION FROM A
FOREIGN SECURITIES REGULATOR;

(©) Supervise, monitor, suspend, or take over the activities of exchanges, clearing
agencies and other SROs;

IMPOSE AND COLLECT FEES FOR THE SUPERVISION, MONITORING OR
OTHER RELATED SERVICES IT RENDERS UNDER THIS CODE;

(g) Impose sanctions for the violation of laws and the rules, regulations and orders issued
pursuant thereto;

(h) Prepare, approve, amend or repeal rules, regulations and orders, and issue opinions
and provide guidance on and supervise compliance with such rules, regulations and orders;

(i Enlist the aid and support of and/or deputize any and all enforcement agencies of the
Government, civil or military as well as any private institution, corporation, firm, association or
person in the implementation of its powers and functions under this Code; Log issue cease and
desist orders without the necessity of notice and hearing to prevent fraud or injury to the
investing publie,

()Punish for contempt of the Commission, both direct and indirect, in accordance with
the PROCEDURES [pertinent provisions of] and penalties THE COMMISSION SHALL
prescribe[d by the Rules of Court};

(k) Compel the officers of any registered corporation or association to call meetings of
stockholders or members thereof under its supervision; Issue subpoena duces tecum and summon
witnesses to appear in any proceedings of the Commission and in appropriate cases, order the
examination, search and seizure of all documents, papers, files and records, tax returns, and
books of accounts of any entity or person under investigation as may be necessary for the proper
disposition of the cases before it, subject the provisions of existing laws:

(I) Issue the following subpoenas and authorize an officer of the commission to sign:
(subpoena duces tecum, to any person, including financial institutions and/or bank officers and
employees, ordering the examination, production, copying or search and seizure of all
documents/records, including those of financial institutions and/or banks, as well as government
securities and foreign currency deposit units, of any person, necessary for the proper disposition
of cases involving any violation of this code and other applicable laws, rules and regulations, or
upon the request for assistance of a foreign securities regulator pursuant to section 65.5 hereof
and shall serve as an exception to the provisions of republic act (r.a.) no. 1405, as amended, r.a.


no. 6426°, as amended, r.a. no. 8791. as amended, and other applicable laws, rules and
regulations.

(m) Subpoena ad testificandum, and summon any person, including financial institutions
and/or bank officers and/or employees, to appear and to testify in any proceedings of the
commission necessary for the proper disposition of cases involving any violation of this code and
other applicable laws, rules and regulations, or upon the request for assistance of a foreign
securities regulator pursuant to section 65.5 hereof and shall serve as an exception to the
provisions of r.a. no. 1405, as amended, r.a. no. 6426, as amended, r.a. no. 8791, as amended, and
other applicable laws, rules and regulations.

"Bank Secrecy Law
Foreign Currency Deposit Act of the Philippines "General Banking Law of 2000

(n) Apply ex-parte with the court of appeals for the issuance of an order to freeze the
assets of a suspected violator of sections 24 to 27 of this code;

(0) Institute civil forfeiture proceedings and all other remedial proceedings.

(p) Suspend, or revoke, after proper notice and hearing the franchise or certificate of
registration of corporations, partnerships or associations, upon any of the grounds provided by
law; andJunder this code and other applicable laws, rules and regulations, or when directed by
final judgment of a court of competent jurisdiction;

(g) Issue writs of execution and attachment to enforce payment of fees, fines and penalties
under this code;

(®) Enter into agreements and arrangements with securities regulators, organizations and
similar entities in other jurisdictions for the development and regulation of the capital market;

(s) Order the return of the amount representing the investments, subscriptions,
contributions or
similar financial participation, and, if warranted, the payment of the value of equitable interest
thereon in case the commission has, after proper hearing, found them to have been solicited under
fraudulent circumstances, and to perform such acts that may be necessary or essential under the
premises; and

() Administer oaths to the officers of issuer or any other person connected therewith as to
its business and affairs

(WExercise such other powers as may be provided by this code and other applicable laws,
rules and regulations as well as those which may be implied from, or which are necessary or
incidental to the carrying out of. The express powers granted the Commission to achieve the

*Sec. 24. Manipulation of Security Prices: Devices and Practices. Sec. 25. Regulamon of
Option Trading. Sec. 26. Fraudulent Transactions Sec. 27. Insider's Dury to Disclose When
Trading objectives and purposes of these laws, RULES AND REGULATIONS.”

SECTION 5. Section 60f the Code is hereby amended to read as follows:


"Sec.6. Indemnification and Responsibilities of Commissioners.-6.1.XXX

6.2. The CURRENT AND FORMER Commissioners, officers and empl
Commission who willfully violate this Code or who are guilty of GROSS negligence OR
MISCONDUCT, abuse or acts of malfeasance (or fail to exercise extraordinary diligence in the
performance of their duties) shall be held liable for any loss or injury suffered by the Commission
or other institutions as a result of such violation, GROSS negligence OR SERIOUS
MISCONDUCT, abuse, malfeasance, [or failure to exercise extraordinary diligence] IN THE
PERFORMANCE OF THEIR DUTIES

Similar responsibility shall apply to the CURRENT AND FORMER Commissioners,
officers and employees of the Commission for (1) the disclosure of any information, discussion
or resolution of the Commission of a confidential nature, or about the confidential operations of
the Commission, unless the disclosure is in connection with the performance of official functions
with the Commission or with prior authorization of the Commissioners; or (2) the use of such
information for personal gain or to the detriment of the government, the Commission or third
parties. Ok

6.3 Officers and employees of the commission shall be defended by lawyers of the
government in lawsuits filed against them in relation to their functions, whether or not such
lawsuits shall be designated by complainants as one in the sec official or employee's personal
capacity in order to harass such officials and employees and hinder them from performing their
functions effectively.

Persons found to have filed such harassment or frivolous lawsuits against officers, direct
and employees of the commission shall, in addition to their liability for malicious prosecution
under the revised penal code, also be liable for fines and penalties equivalent to all costs of suit,
including attorney's fees, transportation costs, photocopying and printing, and all other costs
related to the such a harassment suit

SECTION 6. Section 10of the Code is hereby amended to read as follows:
"Sec. 10. Exempt Transactions. -10.1. XXX.

10.3 Any person applying for exemption under this section shall file AN application for
exemption with the commission, stating the grounds therefor. The exemption shall take effect
only after the commission approves the application and the applicant pays the prescribed [a
notice identifying the exemption relied upon on such form and at such time as the Commission
by rule may prescribe and with such notice shall pay to the Commission

a] fee equivalent to one-tenth (1/10) of one percent (1%) of the maximum aggregate price
or issued value of the securities.”

SECTION 7. Section 12 of the Code is hereby amended to read as follows:
*Sec. 12. Procedure for Registration of Securities.-12.1. XXX

12.3. The information required for the registration of [any kind, and all securities, shali
include, among others, the effect of their [securities issue]ISSUANCE on THE ownership, [on


the mix of ownership, especially foreign and local ownershipJSTRUCTURE AND
EQUITYCOMPOSITION OF THE ISSUER.

12.4. The registration statement shall be signed by the issuer's CHIEF executive officer,
its principal operating officer, its principal financial officer, its comptroller, its principal
accounting officer, or any officer of the issuer either occupying a position equivalent to any of the
foregoing or performing similar functions, [its]and the corporate secretary for persons performing
similar functions} such duly signed regisiration statement shall be accompanied by a duly verified
resolution of the ISSUER'S board of directors [of the issuer corporation. And the written consent
of the expert named as having certified any part of the registration statement and the auditor, as to
the financial data in such registration statement or any document used in connection therewith
[shall also be filed]. Where the registration statement includes shares to be sold by [selling]
existing shareholders, a written certification by such{selling] shareholders as to the accuracy of
any part of the registration statement contributed to by such selling shareholders}representation or
information provided by them in the registration statement shall also be filed.”

SECTION 8. Chapter IV, Section 16 of the Code is hereby deleted pursuant to Republic
‘Act No. 9829
[Chapter IV Regulation of Pre-Need Plans

Sec. 16. Pre-Need Plans. - No person shall sell or offer for sale to the public any pre-need
plan except in accordance with rules and regulations which the Commission shall prescribe. Such
rules shall regulate the sale of pre-need plans by, among other things, requiring the registration of
pre-need plans, licensing persons involved in the sale of pre-need plans, requiring disclosures to
prospective plan holders, prescribing advertising guidelines, providing for uniform accounting
system, reports and record keeping with respect to such plans, imposing capital, bonding and
other financial responsibility, and establishing trust funds for the payment of benefits under Such
plans.

SECTION 9. Section 17 is hereby renumbered as Section 16 and amended to read as
follows:

"Chapter (MV Reportorial Requirements

Sec. [17] 16. Periodic and Other Reports of issuers; CORPORATE RESPONSIBILITY
FOR REPORTS. -[17.11 16.1. Every issuer satisfying the requirements in Subsection (17.21 16.2
hereof shall file with the Commission: XXX
[17.2.116.2. The reportorial requirements of Subsection 17,1 shall apply to the following:

(a) An issuer which has sold a class of its securities pursuant to a registration under
section 12 hereof: Provided however, that the obligation of such issuer to file reports shall be
suspended for any fiscal year after the year such registration became effective if such issuer, as of
the first day of any such fiscal year, has less than TWOfone] hundred [(100)](200)holder of such
class securities or such other number as the Commission shall prescribe and it notifies the
Commission of Such

(b) An issuer with a class of securities listed for trading on an Exchange, and


(c) An issuer with assets of at least Fifty million pesos (50.000.000.00) or Such other

amount as the Commission shall prescribe, and having two hundred (200) or more holder each
holding at least one hundred (100) share of a class of its equity securities: Provided, however,
that the obligation of such issuer to file report shall be terminated ninety (90) days after
notification to the Commission by the issuer that the number of its holders holding at least one
hundred (100) share reduced to less than [one] TWO hundred ((100)(200),
[17.4] 16.4. All reports (including financial statements) required to be filed with the Commission
pursuant (0 Subsection (17.11 16.1 hereof shail be in such form, contain such information and be
filed at such times as the Commission shall prescribe, and shall be in lieu of any periodical or
current reports or financial statements otherwise required to be filed under the Corporation Code.
To promote transparency and accountability, the commission may require that the foregoing
reports be posted on the corporation's website in accordance with such rules and regulations as
the commission may prescribe

16.7. the commission shall, by rule, require, for each company filing periodic reports
under this code, that the principal executive officer or officers and the principal financial officer
or officers, or persons performing similar functions, certify in each annual or quarterly report
filed or submitted to the commission that—

(1) The signing officers have sufficiently reviewed the periodic report for its full
compliance with the requirements under this code;

(2) Based on the officer's knowledge, the report does not contain any untrue statement of
a material fact or omits to state a material fact necessary in order to make the statements made, in
light of the circumstances under which such statements were made, not misleading;

(3) Based on such officer's knowledge, the financial statements, and other financial
information included in the report, fairly present in all material respects the financial condition
and results of operations of the issuer as of, and for, the periods presented in the report;

(4) The signing officers are responsible for establishing and maintaining internal controls
pertaining to the accessibility and availability of material information relating to the issuer and its
subsidiaries necessary in the preparation of periodic reports. for this purpose, the periodic report
shall contain such signing officers’ conclusion about the effectiveness of the issuer's internal
controls based on their evaluation done as of a date within 90 days prior to the report;

(5) The signing officers have disclosed to the issuer's auditors and the audit committee (or
persons fulfilling the equivalent function) -

(a) All significant deficiencies in the design or operation of internal controls which could
adversely affect the issuer's ability to record, process, summarize, and report financial data and
have identified for the issuer's auditors any material weaknesses in internal controls;

(b) Any fraud, whether or not material, that involves management or other employees
who have a significant role in the issuer's intemal controls;

(© Any deficiency in internal controls that have increased the corporation and its
subsidiaries and affiliates’ debt burden beyond what is reasonable within the industry in which it
is engaged


(6) The signing officers have indicated in the report whether or not there were significant
changes in internal controls or in other factors that could significantly affect internal controls
subsequent to the date of their evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.

SECTION 10. Section 18 is hereby renumbered as Section 17 and amended to read as
follows:

"Sec. [18] 17. Reports by Five per centum (5%) Holders of Equity Securities. - [18.1.]
17.1. In every case in which an issuer satisfies the requirements of Subsection [172]16.2hereof,
any person who acquires directly or indirectly the beneficial ownership of at least [more than]
five per centum (5%) of such class or in excess of lesser per centum as the Commission by rule
may prescribe, shall, within ten (10) days after such acquisition or such reasonable time as fixed
by the Commission, submit to the issuer of the security. To the Exchange where the security is
traded, and to the Commission a sworn statement containing the following information and such
other information as the Commission may require in the public interest or for the protection of
investors:

(a) The personal background, identity, residence, and citizenship of, and the nature of
such beneficial ownership by, such person and all other persons by whom or on whose behalf the
purchases are effected in the event the beneficial owner is a juridical person, the lines of business
of the beneficial owner shall also be reported;

() If the purpose of the purchases or prospective purchases is to acquire control of the
business of the issuer of the securities, any plans or proposals which such persons may have that
will effect a major change in its business or corporate structure

(©) The number of shares of such security which are beneficially owned, and the number
of shares concerning which there is a right to acquire, directly or indirectly, by: () such person,
and (each associate of such person, giving the background, identity, residence, and citizenship of
each such associate; and

(d) Information as to any contracts, arrangements, or understanding with any person with
respect to any securities of the issuer including but not limited to transfer, joint ventures, loan or
option arrangements, puts or calls, guarantees or division of losses or profits, or proxies naming
the persons with whom such contracts, arrangements, or understanding have been entered into,
and giving the details thereof.”

SECTION 11. Section 19 is hereby renumbered as Section 18 and amended to read as
follows:

"Sec. [19] 18. Tender Offers. - [191]18.1. (a) Any person or group of persons acting in
concert who intends to acquire, directly or indirectly, through negotiated purchase, whether done
at one instance or within a period of twelve (12) months, at least fifteen percent (15%) of any
class of any equity security of a listed corporation or of any class of an equity security of a
corporation with assets of at least Fifty million pesos (P50,000,000.00) and having two hundred
(200) or more stockholders with at least one hundred (100) shares each or who intends to acquire
at least [thirty percent (30%)] THIRTY-FIVE PERCENT(35%) of such equity over a period of


twelve (12) months shall [make a tender offer to stockholders by filing ] FILE A
DECLARATION TO THAT EFFECT with the Commission[ a declaration to that effect); and
furnish the issuer{] a statement containing such [of the] information required in Section [17]16 of
this Code; PROVIDED, THAT A TENDER OFFER TO ALL STOCKHOLDERS SHALL BE
REQUIRED IN CASE OF ACQUISITION OF AT LEAST THIRTY-FIVE PERCENT (35%)
OVER A PERIODEXCEEDING TWELVE (12) MONTHS. As the Commission may prescribe.
Such person or group of persons shall publish all requests or invitations for tender, or materials
making a (ender offer or requesting or inviting leilers of such a security. Copies of any additional
material soliciting or requesting such tender offers subsequent to the initial solicitation or request
shall contain such information as the Commission may prescribe, and shall be filed with the
Commission and sent to the issuer not later than the time copies of such materials are first
published or sent or given to security holders. When it deems necessary for the protection of
minority shareholders, the commission may add to, clarify, Modify the list of underlying
circumstances which would require the making of a tender offer.

SECTION 12. 19 to 21 accordingly.

Sections 20to 22 are hereby renumbered as Sections

SECTION 13.

Section 23 is hereby renumbered as Section 22 and amended to read as follows:

"Sec [23] 22. Transactions of Directors, Officers and Principal Stockholders. - (23.1.]
22.1. Every person who is directly or indirectly the beneficial owner of [more than] AT LEAST
ten per centum (10%) of any class of any equity security which satisfies the requirements of
Subsection [17.2]16.2, or who is a director or an officer of the issuer of such security, shall file,
at the time either such requirement is first satisfied or within ten days after he becomes such a
beneficial owner, director, or officer, a statement with the Commission; provided, that if such
security is listed for trading in an Exchange, also with the Exchange, of the amount of all equity
securities of such issuer of which he is the beneficial owner, and within ten (10) days afler the
close of each calendar month thereafter, if there has been a change in such ownership during such
month, shall file with the Commission, and if such security is listed for trading on an Exchange,
shall also file with the Exchange, a statement indicating his ownership at the close of the calendar
month and such changes in his ownership as have occurred during such calendar month.

[23.2122.2. TO[For the purpose of preventing}prevent the unfair use of information which
may have been obtained by such beneficial Owner, director, or officer by reason of his
relationship to the issuer. any profit realized by him from any purchase and sale, or any sale and
purchase, of any equity security of such issuer within any period of less than six (6) months,
unless such security was acquired in good faith in connection with a debt previously contracted,
shall inure to and be recoverable by the issuer, irrespective of any intention of holding the
security purchased or of not repurchasing the security sold for a period exceeding six (6) months.
Suit to recover such profit may be instituted before the Regional Trial Court by the issuer, or by
the owner of any security of the issuer in the name and in behalf of the issuer if the issuer shall
fail or refuse to bring such suit within sixty (60) days after request or shall fail diligently to
prosecute the same thereafter, but no such suil shall be brought more than two (2) years aller the
date such profit was realized. This subsection shall not be construed to cover any transaction
where such beneficial owner was not such both at the time of the purchase and sale, or the sale


and purchase of the security involved, or any transaction or transactions which the Commission
by rules and regulations may exempt as not comprehended within the purpose of this subsection.

[23.3]22.3. It shall be unlawful for any such beneficial owner, director, or officer, directly
or indirectly, to sell any equity security of such issuer if the person selling the security or his
principal: (a) Does not own the security sold; or (b) If owning the security, does not deliver it
against such sale within twenty (20) days thereafter, or does not within five (5) days after such
sale deposit it in the mails or otter usual channels of transportation, but no person shall be
deemed to have violated this subsection if he proves that notwithstanding the exercise of good
faith he was unable to make such delivery or deposit within such time, or that to do so would
cause undue inconvenience or expense.

[23.4]22.4. The provisions of Subsection (23.2] 22.2 shall not apply to any purchase and
sale, or sale and purchase, and the provisions of Subsection (23.3722.3 shall not apply to any
sale, of an equity security not then or thereafter held by him in an investment account, by a dealer
in the ordinary course of his business and incident to the establishment or maintenance by him of
a primary or secondary market, otherwise than on an Exchange, for such security. The
Commission may, by such rules and regulations as it deems necessary or appropriate in the public
interest, define and prescribe terms and conditions with respect to securities held in an investment
account and transactions made in the ordinary course of business and incident to the
establishment or maintenance of a primary or secondary market.

SECTION 14. Sections 24 to 27 are hereby renumbered as Sections23 to 26 accordingly.

SECTION 15. Section 28 is hereby renumbered as Section 27 and amended to read as
follows:

"Sec. [28] 27. Registration of Brokers, Dealers, Salesmen and Associated Persons. [28.1]
27.1.

[28.4] 27.4. The Commission shall promulgate rules and regulations prescribing the
qualifications for registration of each category of applicant, which shall, among other things,
require as a condition for registration that:

(a) If @ natural person, the applicant satisfactorily passES a written examination as to his
proficiency and knowledge in the area of activity for which registration is sought,

(b)In the case of a broker or dealer, the applicant [satisfy| MEETS a minimum net capital
OR OTHER CAPITAL ADEQUACY RATIOs as prescribed by the Commission, and provides a
bond or other security as the Commission may prescribe to secure compliance with the provisions
of this Code; and

SECTION 16.

Section 29 is hereby renumbered as Section 28.

SECTION 17,


Section 30 is hereby renumbered as Section 29 and amended to read as follor ‘Sec. [30]
29. Transactions and Responsibility of Brokers and Dealers. — 130.11 29.1.UNLESS
OTHERWISE AUTHORIZED BY THE COMMISSION, no broker or dealer shall deal in or
otherwise buy or sell, DIRECTLY OR INDIRECTLY, for its own account or for the account of
customers, securities listed [o]in an Exchange issued by any corporation where any stockholder,
director, associated person or salesman, or authorized clerk of said broker or dealer and all the
relatives of the foregoing within the fourth civil degree of consanguinity or affinity, is, at the
time, holding office in said issuer corporation as a director, presideni, vice-president, manager,
treasurer, comptroller, corporate secretary or assistant corporate secretary or any office of trust
and responsibility, or is a controlling person of the issuer.”

SECTION 18.
Sections 31 to 33 are hereby renumbered as Sections 30 to 32 accordingly.

SECTION 19. Section 34 is hereby renumbered as Section 33and amended to read as
follows:

"Sec. [34] 33. Segregation and Limitation of Fuuctious of Members, Brokers aud Dealers.
~ [34.1] 33.1 [it shall be unlawful for any member-broker of an Exchange to] no member of an
exchange shall effect any transaction on such Exchange for its own account, the account of an
associated person, or an account with respect to which it or an associated person thereof exercises
investment discretion: Provided, however, that this section shall not make unlawfull Prohibit

(a) Any transaction by a member [broker] acting in the capacity of a market maker;

(b) Any transaction reasonably necessary to carry on odd-Hot transactions; to offset a
transaction made in error, and

SECTION 20. Section 35 is hereby renumbered as Section 34 and amended to read as
follows:

"Sec. [35] 34. Additional Fees of Exchanges. - In addition to the registration fee
prescribed in Section [33] 32 of this Code, every Exchange shall pay to the Commission, son a
semestral basis) on or before the tenth day[ofJAFTER the end of every semester of the calendar
year, a fee in such an amount as the Commission shall prescribe, but not more than one-
hundredth of one per centum (1%) of the aggregate amount of the sales of securities transacted on
such Exchange during the preceding[calendar year.] semester for the privilege of doing business
during [the preceding calendar year] such semester or any part thereof.”

SECTION 21. Sections 36 to 37 are hereby renumbered as Sections 35 to 36 accordingly.

SECTION 22. Section 38 of the Code is hereby renumbered as Section 37 and amended
to read as follows:

"sec. [38] 37 fit and proper rule and independent directors- 37.1. the commission may prescribe,
in addition to those set forth in the corporation code, such qualifications and/or disqualification
for election or appointment as directors of corporations covered by this code. Any question about


the qualification of directors shall, after proper hearing, be resolved by the commission in
accordance with its rules and regulations.

37.2. [Independent Directors-1 Any corporation with a class of equity securities listed for
trading on an Exchange or with assets in excess of at least Fifty million pesos (P50,000,000.00)
and having two hundred (200) or more holders, at least two hundred (200) of which are each
holding at least one hundred (100) shares of a class of its equity securities or which has sold a
class of equity securities io the public pursuant io an effective registration statement in
compliance with Section 12 hereof shall have at least two (2) independent directors) or such
number of independent directors WHICH shall constitute at least{twenty percent (20%) THIRTY
PERCENT (30%) of the members of such board, whichever is the lesser higher, or such number
as the commission may from time to time require in accordance with international standards. For
this purpose, an independent director" shall mean a person other than an officer or employee of
the corporation, its parent or subsidiaries, or any other individual having a relationship with the
corporation, which would interfere with the exercise of independent judgment in carrying out the
responsibilities of a director."

SECTION 23.
Sections 39 to 41 are hereby renumbered as Sections 38 to 40 accordingly.

SECTION 24. Section 42 of the Code is hereby renumbered as Section 41 and amended
to read as follows:

"Sec. [42] 41. Registration of Clearing Agencies - [42.1] 41.1. Any clearing ageney may
be registered as such with the Commission under the terms and conditions hereinafter provided in
this section, by filing an application for registration in such form and containing such information
and supporting documents as the Commission by rule shall prescribe, including the following:

(@) An undertaking to comply and enforce compliance by its participants with the
provisions of this Code, and any amendment thereto, and the implementing rules or regulations
made or to be made there under, and the clearing agency's rules;

(b) The organizational charts of the [Exchange]clearing agency, its rules of procedure,
and a list of its officers and participants;

[42.5] 41.5 Section [32]3 of this Code shall apply to every registered clearing agency.”
SECTION 25. Section 42 is hereby renumbered as Section 41.

SECTION 26. Section 43 is hereby renumbered as Section 42 and amended to read as
follows:

"Sec. [43] 42. Uncertificated/scripless securities. - notwithstanding section 63 of the
corporation code of the philippines: 42.1.unless exempted by the commission for justifiable
reasons and upon application, a corporation whose securities are {registered pursuant to this code
or listed on a securities exchange may] listed in an exchange shall issue its shares, or record the
transfer or dispositionof the same in uncettificated or scripless form; provided, however, that


proof of ownership of shares other than in scripless form may be issued by the corporation under
such terms and condition as the commission may prescribe.

(a) If so resolved by its Board of Directors and agreed by a shareholder, investor or
securities intermediary, issue shares to, or record the transfer of some or all of its shares into the
name of said shareholders, investors or, securities intermediary in the form of uncertificated
securities. The use of uncertificated securities in these circumstances shall be without prejudice to
ihe rights of the securities intermediary subsequenily (0 require the corporation (0 issue a
certificate in respect of any shares recorded in its name, and

(b) If so provided in its articles of incorporation and bylaws, issue all of the shares of a
particular class in the form of uncertificated securities and subject to a condition that investors
may not require the corporation to issue a certificate in respect of any shares recorded in their
name.

42.3 xxx However, nothing in this code shall preclude compliance by banking and other
institutions under the supervision of the [Bangko Sentral ng Pilipinas] BSP and their stockholders
with the applicable ceilings on shareholdings prescribed under pertinent banking laws and
regulations.”

SECTION 27. Sections 44 to 51 are hereby renumbered as Sections 43 to 50 accordingly.

SECTION 28. Section 52 is hereby renumbered as Section 51 and amended to read as
follows:

sec. [52] 51. Accounts and records, reports, financial statements, examination of
exchanges, members, and others -- 52.1. every registered exchange, broker or dealer, transfer
agent, clearing agency, securities association, and other sro[self-regulatory organization), and
every other person required to register under this code, shall make, keep and preserve for such
periods, records, furnish such copies thereof, and make such reports, as the commission by its
rules and regulations may prescribe. such accounts, correspondence, memoranda, papers, books,
and other records, including financial statements, shall be subject at any time to such reasonable
periodic, special or other examinations by representatives of the commission as the commission
may deem necessary or appropriate in the public interest of for the protection of investors.
audited financial statements, when so required, must have been audited by commission accredited
auditors, who shall have complied and subjected to the qualified assurance procedures of the
commission.

52.3. For purposes of this section, the term "records refers to accounts, correspondence,
memoranda, tapes, discs, papers, books and other documents or transcribed information of any
type, whether written or electronic in character, including financial statements.

SECTION 29. Section 53 is hereby renumbered as Section 52 and amended to read as
follows:

"See. [53]52. Investigations, injunctions and Prosecution of Offenses. [53]52.1The
Commission may, in its discretion, make such investigations as it deems necessary to determine
whether any person has violated or is about to violate any provision of this Code, any rule,
regulation or order thereunder, or any rule of an Exchange, registered securities association,


clearing agency other self-regulatory organization, and may require or permit any person to file
with it a statement in writing, under oath or otherwise, as the Commission shall determine, as to
all facts and circumstances concerning the matter to be investigated. The Commission may
publish information Conceming any such violations, and to investigate any fact, condition,
practice of matter which it may deem necessary or proper to aid in the enforcement of the
provisions of this Code, in prescribing of rules or regulations thereunder, or in securing
information to serve as a basis for recommending further legislation concerning the matters to
which his Code relates: Provided, however, that any person requested or subpoenaed to produce
documents or testify in any investigation shall simultaneously be notified in writing of the
purpose of such investigation Provided further. That all criminal complaints for violation of this
Code, and the implementing rules and regulations enforced or administered by the Commission
shall be referred to the Department of Justice for preliminary investigation and prosecution before
the proper court: Provided furthermore, That in instances where the law allows independent civil
or criminal proceedings of violations arising from the same act, the Commission shall take
appropriate action to implement the same: Provided, finally. That the investigation, prosecution,
and trial of such cases shall be given priority by the commission. Information obtained by the
commission during the course of any investigation, while the same has not been terminated, shall
be confidential in nature and may be disclosed only upon order of the commission.

Whenever it shall appear to the commission that any person has violated this code, other
applicable laws, rules and regulations thereof, or a cease and desist order issued by the
commission pursuant to subsection 52.3, the commission may independently and separately
institute a civil enforcement action before the court for the payment by the violator of civil
penalties in accordance with subsection 62.4. A civil enforcement action instituted by the
commission under this paragraph shall be separate from and in addition to any criminal action the
commission may refer to the department of justice or any other action that the commission is
entitled to take under this code

[53.2] 52.2. for the purpose of any such investigation, or any other proceeding or
provision under this code, or other applicable laws, rules and regulations, the commission or any
officer designated by it is empowered to administer oaths and affirmations, subpoena witnesses,
compel attendance and/other taking of a person's statement, or where permissible, testimony
under oath or oral or written deposition, take evidence, require the production of any
documents/records relevant or material to the inquiry, and to perform such other acts necessary in
the conduct of such investigation or proceedings. the commission's power to require the
production of documents/records herein, as well as to disclose the same as set forth in subsection
65.5, or as may elsewhere be provided in this code, other applicable laws, rules and regulations,
shall include inquiries into all documents/records, including those of financial institutions and/or
banks, and other related information held by financial institutions and or banks, and shall serve as
‘an exception to the provisions of r.a. no. 1405 (as amended), r.a. no. 6426 (as amended), r.a. no.
8791 (as amended) and other applicable laws, rules and regulations. The commission shall have
the right to keep in its custody the documents/records produced or seized under this section for
such period as it considers necessary or until it concludes its investigation. thereafter, the
commission shall return the documents/records to the person who produced the same, or as the
case may be, to the court issuing the warrant; provided that the commission may, before returning
such documents/records, copy, reproduce and/or place identification marks on them or any part
thereof. In the course of the taking of a person's statement or testimony, oral or written
deposition. Pursuant to a request for assistance of a foreign securities regulator, the commission


may allow the presence of a representative from such requesting authority. The commission shall
issue such other rules as may be applicable to this section."

SECTION 30. Section 54 is hereby renumbered as Section 53 and amended to read as
follows:

"Sec. [54] 53. - Administrative Sanctions. - [54.1] 53.1 If, after due notice and hearing,
the Commission finds that: (a) There is a violation of this Code, its rules, or its orders; (b) Any
registered broker or dealer, associated person thereof has failed reasonably to supervise, with a
view to preventing violations, another person subject to supervision who commits any such
violation; (c) Any registrant or other person has, in a registration statement or in other reports,
applications, accounts, records or documents required by law or rules to be filed with the
Commission, made any untrue statement of a material fact, or omitted to state any material fact
required to be stated therein or necessary to make the statements therein not misleading; or, in the
case of an underwriter, has failed to conduct an inquiry with reasonable diligence to insure that a
registration statement is accurate and complete in all material respects; or (d) Any person has
refused to permit any lawful examinations into its affairs, it shall, in its discretion, and subject
only to the limitations hereinafter prescribed, impose any or all of the following sanctions as may
be appropriate in light of the facts and circumstances: Suspension, or revocation of any
registration for the offering of securities;

A fine of not less than (Ten thousand pesos (P10,000.00)JONE HUNDRED THOUSAND
PESOS (P100,000.00)nor more than [One million pesos (P1,000,000.00)JFIVE MILLION
PESOS (P5,000,000.00)plus not more than (Two thousand pesos (P2,000.00)]FIVE
THOUSAND PESOS (P5,000.00)for each day of continuing violation;

In the case of a violation of Sections 16, [19.21 18.2, [20] 19, 22, [24] 23, [26] 25 and
[27] 26, disqualification from being an officer, member of the Board of Directors, or person
performing similar functions, of an issuer required to file reports under Section [17] 16 of this
Code or any other act, rule or regulation administered by the Commission,

In the case of a violation of Section{34]26, a fine of no more than three (3) times the
profit gained or loss avoided as a result of the purchase, sale or communication proscribed by
such Section, and

Disgorgement of unlawfully obtained profits or restitution of losses avoided through
illegal or unauthorized means. Plus equitable or beneficial interest thereon, as may be determined
by the commission; and

Other penalties within the power of the Commission to impose.

[54.2]53.2. The imposition of the foregoing administrative sanctions shall be without
prejudice to the filing of criminal charges and/or civil enforcement actions against those
responsible for the violation. The commission may, motu proprio or upon the directive of the
department of justice in the criminal case or of the court in the civil enforcement action, prohibit
the violator from acting as an officer or member of the board of directors of any issuer of
securities under such terms and conditions as the commission may prescribe.


[54.3]53.3. The Commission shall have the power to issue writs of execution to enforce
the provisions of this section and to enforce payment of the fees and other dues collectible under
this Code. The commission shall prescribe the rules for the issuance, enforcement and stay of
such writs of executionno writ ofexecution issued pursuant to this subsection shall be stayed by
injunctive writ except when issued by the court of appeals or the Supreme Court."

SECTION 31. 54 to 61 accordingly.

Sections 55 to 62 are hereby renumbered as Sections

SECTION 32.

Section 63 is hereby renumbered as Section 62 and amended to read as follows:

"SEC. [63] 62. Amount of Penalties, Damages and Fines to be Awarded - [63. 1] 62.1.

62.4. In civil enforcement actions instituted by the commission pursuant to subsection
52.1, the court shall determine the amount of the penalty in light of the facts and circumstances.
For each violation, the amount of the penalty shall not be less than one hundred thousand pesos
(plip100,000,00) and shall be double the amount of the ansaction plus actual damages and a
daily fine of five thousand pesos (php5,000.00) until such penalties are fully paid; provided,
further, that if the violation involved fraud, deceit, manipulation, or deliberate or reckless
disregard of a regulatory requirement, the amount of the penalty shall not exceed treble the
amount of the transaction and a daily fine of seven thousand five hundred pesos (php7,500.00)
until such penalties are fully paid; provided finally, that if the violation involved fraud, deceit,
manipulation, or deliberate or reckless disregard of a regulatory requirement and such violation
directly or indirectly resulted in substantial losses or created a significant risk of substantial
losses to other persons, the amount of the penalty shall not exceed quadruple the amount of the
transaction plus actual damages and a daily fine of ten thousand pesos (php10,000.00) until such
penalties are fully paid: provided furthermore, that if the violator self-reported, self-remediated
and fully cooperated with the commission's investigation, the maximum penalty shall be one-half
of the amounts specified above; provided, finally, that if the violator has been found to have
previously violated this code, its rules, or the rules of self-regulatory organization, or has been
previously ordered by the commission or by a court of competent jurisdiction to desist from acts
violative of this code, its rules, or the rules of selfregulatory organization, the penalty shall not
exceed ireble the amounts specified above.

62.5. Penalties imposed under subsection 62.4 shall be payable to the treasury except as
otherwise provided in subsection 62.6 and 62.7.

62.6, If the commission in any judicial or administrative action brought by it under this
code, obtains an order requiring disgorgement against any person for a violation of such laws or
the rules or regulations thereunder, or such person agrees in settlement of any such action to such
disgorgement, and the commission also obtains pursuant to such laws a civil penalty against such
person, the amount of such civil penalty shall, on the motion or at the direction of the
‘commission, be added to and become part of the disgorgement fund

For the benefit of the victims of such violation in accordance with the rules and
regulations the commission shall prescribe therefor.


62.7. From the civil penalties awarded and after any appropriate disgorgement is made,
the commission shall pay an award to the whistle blowers who voluntarily provided
originalization to the commission crucial to the attainment of the judgment against the violator
equivalent to not less than ten percent (10%) and not more than thirty percent (30%), of the civil
penalties awarded taking into consideration (a) the significance of the information vis-a-vis the
success of the civil enforcement action, (b) the degree of assistance provided by the whistle
blower and his legal representative, and (c) such additional factors as the commission may
establish by rule or regulation.

No award under this subsection shall be made to any whistle blower who:

(a)Is, or was, at the time he acquired the original information, a member, officer, or
employee of the commission, the department of justice, a self-regulatory organization, a law
enforcement organization or any similar agency or organization;

(b)Is convicted of a criminal violation related to the civil enforcement action for which
the whistle blower otherwise could receive an award under this subsection;

(c)Gains the information through the performance of an audit of financial statements
required under this code; or

(@Fails to submit information to the commission in such form as the commission may
require under this code, the corporation code and the rules and regulations of the commission.

Section 33. Sections 64 to 65 are hereby renumbered as sections 63 to 64 accordingly.
Section 34.

Section 66 is hereby renumbered as section 65 and amended to read as follows:
Sec. [66] 65. Revelation of information filed with the commission and of

[66.5] 65.5 notwithstanding anything in subsection 66.4 to the contrary, on request from a

foreign securities regulator of any country whose laws grant reciprocal assistance as herein
provided, the commission [may] shall provide assistance in accordance with this subsection,
including the disclosure of any information filed with or transmitted to the commission
exercising such power as provided in section 52, if the requesting authority states that it is
conducting an investigation which it deems necessary to determine whether any person has
violated, is violating, or is about to violate any applicable laws, rules and regulations, relating to
securities or commodities matters that the requesting authority administers or enforces. Such
assistance will not be denied based on the fact that the type of conduct subject of the request for
assistance would not constitute a violation of applicable iaws, rules and regulations of the
philippines, as requested authority.
Any information requested by the foreign securities regulator could be used by said regulator for
the purposes set forth in the request for assistance within the general framework of the use stated
in the request, including the conduct of any civil, administrative and/or criminal proceeding. If
the requesting authority intends to use the information for any purpose other than those stated in
the request, it must obtain the consent of the requested authority.


65.6. The commission shall not disclose the existence of a request for assistance as well
as any documents/records or testimonies obtained (a) from a foreign securities regulator in
connection to a request for assistance made by the commission pursuant to a memorandum of
understanding and other information sharing procedure, and (b) for the foreign securities
regulator in relation to a request for assistance received by the commission pursuant to a
memorandum of understanding and other information sharing procedure.

65.7. The disclosure of the existence of a request for assistance shall be made only when
necessary to carry out such request. All other information obtained under section 65.6 shall be
used only as indicated in the request for assistance and in accordance with applicable laws, rules
and regulations, provided, that, the commission must obtain the consent of the foreign securities
regulator for the use of such information other than for the purposes indicated in the request.

Section 35. Section 67 is hereby renumbered as section 66.
Section 36.

Section 68 is hereby renumbered as sections 67 and amended to read as follows:

"Sec. [68] 67.special accounting rules. - the commission shall have the authority to make,
amend, and rescind such accounting rules and regulations to be followed by the companies and
the auditors who audit the financial statements of these companies, as may be necessary to carry
ut the provisions of this code, including rules and regulations as may be necessary to carry out
the provisions of this code, including rules and regulations governing registration statements and
prospectuses for various classes of securities and issuers, and defining accounting, technical and
trade terms used in this code. Among other things, the commission may prescribe the form or
forms in which required information shall be set forth, the items or details to be shown in the
balance sheet and income statement, and the methods to be followed in the preparation of
accounts, appraisal or valuation of assets and liabilities, determination of depreciation and
depletion, differentiation of recurring and non-recurring income, differentiation of investment
and operating income, and in the preparation, where the commission deems it necessary or
desirable of consolidated balance sheets or income accounts of any person directly or indirectly
controlling or controlled by the issuer, or any person under direct or indirect common control
with the issuer. The commission may also require the accreditation of the auditors of certain
companies registered with the commission, and requiring these auditors to be subjected to the
commission's oversight assurance review.

Section 37. Section 69 is hereby renumbered as section 68.

Section 38. Section 70 is hereby renumbered as section 69 and amended to read as
follows:

"Sec. [70] 69. Judicial review of and injunction against commission orders. - any person
aggrieved by an order of the commission may appeal the order to the court of appeals by petition
for review in accordance with the pertinent provisions of the rules of court. No court below the
court of appeals shall have jurisdiction to issue any restraining order, preliminary injunction or
preliminary mandatory injunction in any case, dispute or controversy that, directly or indirectly,


interferes with the performance by the commission of its duties and responsibil
code."

Section 39. Section 71 is hereby renumbered as section 70.

Section 40. Section 72 is hereby renumbered as section 71 and amended to read as
follows:

"Sec. [72] 71. Rules and regulations; effectivity. - 72.1] 71.1. This code shall be self-
executory. To effect the provisions and purposes of this code, the commission may issue, amend,
and rescind such rules and regulations and orders necessary or appropriate, including rules and
regulations defining accounting, technical, and trade terms used in this code, and prescribing the
form or forms in which information required in registration statements, applications, and reports
to the commission shall be set forth. For purposes of its rules or regulations, the commission may
classify persons, securities, and other matters within its jurisdiction, prescribe different
requirements for different classes of persons, securities, or matters, and by rule or order,
conditionally or unconditionally exempt any person, security, or transaction, or class or classes of
persons, securities or transactions, from any or all provisions of this code.

71.3. For the purpose of subsection (72.21 71.2, a purchase by or for the issuer or any
person controlling, controlled by, or under common control with the issuer, or a purchase subject
to the control of the issuer or any such person, shall be deemed to be a purchase{d] by the issuer.
The commission shall have the power to make rules and regulations implementing this
subsection, including exemptive rules and regulations covering situations in which the
commission deems it unnecessary or inappropriate that a purchase of the type described in this
subsection shall be deemed to be a purchase by the issuer for the purpose of some or all of the
provisions of subsection [72.21 71.2.

72.41 71.4 the rules and regulations promulgated by the commission pursuant to this code
shall be published in [two (2)] a national newspaper{s] of general circulation in the Philippines,
and unless otherwise prescribed by the commission, the same shall be effective fifteen (15) days
afier the date of the last publication.”

Section 41. Section 73 is hereby renumbered as section 72and amended to read as
follows:

Sec. 72. Penalties. Any person who violates any of the provisions of this code, or the rules
and regulations promulgated by the commission under authority thereof, or any person who, in a
registration statement filed under this code, makes any untrue statement of a material fact or
omits to state any material fact required to be stated therein or necessary to make the statements
therein not misleading, shall, upon conviction, suffer a fine of not less than[fifty thousand pesos
(P50,000.00)]two hundred thousand pesos (P200,000.00}nor more than (five million pesos
(P5,000,000.00) Ten Million pesos (P10,000,000.00) or imprisonment of not less than seven (7)
years nor more than twenty-one years, or both in the discretion of the court. If the offender is a
corporation, partnership or association or other juridical entity, the penalty may, in the discretion
‘of the court, be imposed upon such juridical entity and upon the officer or officers of such
corporation, partnership, association or entity responsible for the violation, and if such offender is
a non-filipino citizen, he shall, in addition to the penalties prescribed, be deported without further
proceedings after service of sentence.


Section 42. Section 74 is hereby renumbered as section 73 and amended to read as
follows:

"Sec. 744 73. Transitory provisions. - the commission, as organized under existing laws,
shall continue to exist and exercise its powers, functions and duties under such laws and this
code: provided, that until otherwise mandated by a subsequent law, the commission shall
continue to regulate and supervise commodity futures contracts as provided in section 11 [and
pre-need plans and the pre-need indusiry as provided in section 16} of this code,

Section 43. A new provision is inserted in the code as section 74 as follows:

"sec. 74. Destruction, alteration, or falsification of records. - any person who knowingly
alters, destroys, mutilates, conceals, covers up, falsifies, or makes a false entry in any document
or record, in whatever form, as defined by section 52.3 hereof shall be fined an amount ranging
from five hundred thousand pesos (Php5S00,000.00) to ten million pesos (Php10,000,000.00)
and/or imprisonment of five (5) to twenty (20) years, at the discretion of the court."

Section 44. A new provision is inserted in the code as section 75 as follows:
"sec. 75. Retaliation against whistleblowers.-any person who, knowingly and with the intent to
retaliate, takes any action harmful to another person, including but not limited to interference
with the lawful employment or livelihood of any person, for providing any truthful information
relating to the commission or possible commission of any offense or violation under this code,
shall be punished with a fine ranging from five hundred thousand pesos (php1,000,000.00) to one
million pesos (php2,000,000.00) and or imprisonment of five (8) to ten (12) years, at the
discretion of the court."

Section 45. Implementing rules and regulations. - The commission shall promulgate the
necessary rules and regulations for the effective implementation of this act.

Section 46. Separability clause. - If any provision of this act is declared invalid or
unconstitutional, other provisions hereof which are not affected thereby shall continue to be in
full force and effect.

Section 47. Repealing clause. - any law, presidential decree or issuance, executive order,
letter of instruction, administrative order, rule or regulation contrary to or inconsistent with any
provision of this act is hereby repealed or modified accordingly.

Section 48. Effectiviff clause. - this act shall take effect fifteen (15) days after its
complete publication inthe official gazette or in at least two (2) newspapers of general
circulation, whichevgr“date comes earlier.