Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
Second Regular Session

House Bill No. 66914

INTRODUCED BY REPRESENTATIVE ARTHUR C. YAP

EXPLANATORY NOTE

The Securities Regulation Code was enacted in 2000 to serve as the enabling
charter of the Securities and Exchange Commission (SEC) providing for its
organization, powers and functions.Further, the SRC statesthe mandate of the SEC to
Promote the development of the capital market, protect investors and maintain market
integrity and provides for the regulations applicable to publicly-listed and public
corporations.

Being the primary agency specifically tasked to regulate and supervise the
capital market, the SEC has the duty to ensure that the rules and regulations affecting
securities transactions are pertinent and current, aligned with intemational best
practices and with principles espoused by international regulatory bodies.

One such regulatory body, recognized worldwide, which sets the international
standards for market and securities regulations is the Intemational Organization of
Securities Commission (IOSCO). With 217 members comprised of securities regulators
and other affiliate institutions from different parts of the world, the IOSCO has built
global community which seeks to foster close coordination and cooperation between
regulators and stakeholders of the capital market as well as improve regulatory and

In response to the increasing international activity in the securities and
derivatives markets, and the corresponding need for mutual cooperation and
consultation among securities regulators to ensure compliance with, and enforcement
of, their securities and derivatives laws and regulations, the IOSCO developed the
Multilateral Memorandum of Understanding (MMOU) in 2002. The MMOU established
regulators with the tools for combating cross-border fraud and misconduct that can
weaken global markets and undermine investor confidence.

Recognizing the importance of cooperation and information-sharing among
‘securities regulators, the Philippines applied to become an IOSCO MMoU signatory in
2003 and 2014. Unfortunately. in both instances, the applications were not accepted as.
the Philippines is deemed unable to comply with all the provisions of the MMoU
concerning theinability of the SEC to directly obtain information on bank records and
deposits and disclose that information to foreign securities regulators.


In this regard, the proposed legislation grants the SEC direct access to bank
records/information only in the conduct of a formal investigation on securities violations
or pursuant to a request from a foreign securities regulator as an exception to R.A
4405, “The Law on the Secrecy of Bank Deposits”. The proposed amendments further
include limitations on the use of the information obtained and/or shared with the foreign
counterpart.

The passage of the proposed legislation will not only allow the SEC to more
effectively exercise its operational mandate of protecting investors, increasing investor
confidence, and maintaining the integrity of the country’s securities and derivatives
market, it will alsoenable the Philippines to sign the OSCO MMoU. This, in turn, will lead
to the inclusion of the Philippines in regional initiatives facilitating cross-border trading of
financial products such as the Asia Region Funds Passport (ARFP) and the ASEAN CIS
(Collective Investment Scheme) which require members to be a signatory to the IOSCO
MMoU.

Without the proposed amendments, the Philippines will be subject to international
counter-measures (i.e. limitation/prohibition of overseas financial flows; loss of
correspondentships with foreign banks), perceived as a non-cooperative jurisdiction and
a haven for illegal financial activities, and be ineligible for loan grants and technical
assistance from international organizations.

Other amendments in the proposed legislation are aimed at reinforcing the
investor protection functions of the Commission, in response to the proliferation of
domestic as well as cross-border investment scams,with a view of providing remedies
for the return of gains from illegal financial transactions to the victims.

Lastly, the proposed legislation also includes provisions for the improved intemal
organization of the SEC that will bolster integrity, efficiency and accountability in
rendering services to the public.

With the foregoing backdrop and objectives in mind, the urgency of the
amendments becomes apparent. It is hoped that these amendments will be given
priority status.


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
Second Regular Session

House Bill No.8694

INTRODUCED BY REPRESENTATIVE ARTHUR C. YAP

AN ACT AMENDING REPUBLIC ACT NO. 8799 (R.A. 8799),
OTHERWISE KNOWN AS THE SECURITIES REGULATIONCODE

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.

x0e
SECTION 2. Section 3 of the Code is hereby amended to read as follows:

“Sec. 3. Definition of Terms. - 3.1. “Securities” are shares[JOR
participation or interests in a corporationfor in a], commercial
enterprise[,Jor profit-making venturef[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)Iinvestment 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
Fights:]

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

[(e)(D) Certificates of assignment{s], certificates of participation,
trust certificates, [voting trust certificates]or similar instruments;

[(NKE)Proprietary or nonproprietary membership certificates in
corporations; and

[(9)](F)Other instruments as may in the future be determined by
the Commission.

XXX

3.3. “Broker’ is a person engaged in the business of [buying and
sellingJEFFECTING TRANSACTIONS IN securities for the account of
others.

xxx

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)

[8.5]3.6."Associated person of a broker or dealer’ isfan)(A) ANY
employee [thereof] OF A BROKER OR DEALER whof] directly OR
INDIRECTLY exercises control [of]OR supervisory authority[,
bufJOVER 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 2 salesman, [or] an agent, or
aNY person ASSOCIATED WITH A BROKER OR DEALER whose
functions are solely clerical or ministerial.

[3.6]3.7.Clearing agency’ [is anyJMEANS any person who acts as
AN intermediary in making[deliveries upon] paymentS[to effect

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 (I) 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 (II)
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.(n)

[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]3.10. “Insider means: (a) the issuer, (BJA PERSON
CONTROLLING THE ISSUER; [(b)] (C) a director or officer (or
person performing similar functions) of the issuer, or the person
controlling the issuer, {(c)D) 2 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;[(d)E) a government employee, or director, or
officer of an exchange, clearing agency andlor self-regulatory
organization who has access to material information about an issuer or
a security that is not generally available to the public; [or] [(e)(F) 2
person who leams such information by a communication from any of
the foregoing insiders[]; (G) 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 PUBLIC;(H) A TIPPER; OR
() 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.

[B.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.)

[8.10.]3.12. “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.

[8.11] 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.

[8.13]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,

[8.14]3.16."Uncertificated security’ is a security evidenced by
electronic or similar records.

[8.15] 3.17."Underwriter is a person who guarantees on a firm
commitment and/or declared best effort basis the distribution and sale
of securities fof any kind}ISSUED by another
[company]JCORPORATION.

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.

XXX

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.}4.4. 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

4


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 ail its administrative
bodiesIN 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.

[4.5]4.6. 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, conceming 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;

(d) Regulatef, investigate or]JAND 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;

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

(NIMPOSE AND COLLECT FEES FOR THE
SUPERVISION, MONITORING OR OTHER RELATED
SERVICES IT RENDERS UNDER THIS CODE;(n)

[(N1(g) Impose sanctions for the violation of laws and the
rules, regulations and orders issued pursuant thereto;

{(9)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;

[(h)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;

[()]@)Issue cease and desist orders WITHOUT THE
NECESSITY OF NOTICE AND HEARING to prevent fraud or
injury to the investing public;

[WNk)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)] () Compe! 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 retums, 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 t the provisions of existing laws;}(mSSUE THE
FOLLOWING SUBPOENAS AND AUTHORIZE AN OFFICER
OF THE COMMISSION TO SIGN:

(i) SUBPOENA DUCES TECUM, TO ANY
PERSON, INCLUDING FINANCIAL INSTITUTIONS
ANDIOR 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.

(ji) SUBPOENA AD TESTIFICANDUM, AND
SUMMON ANY PERSON, INCLUDING FINANCIAL
INSTITUTIONS AND/OR BANK OFFICERS AND/OR
EMPLOYEES, TO APPEAR AND TO TESTIFY IN ANY

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;

{o) INSTITUTE CIVIL FORFEITURE PROCEEDINGS
AND ALL OTHER REMEDIAL PROCEEDINGS.

[(m)] (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;

(qa) 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

(t) ADMINISTER OATHS TO THE OFFICERS OF
ISSUER OR ANY OTHER PERSON CONNECTED
THEREWITH AS TO ITS BUSINESS AND AFFAIRS.

[(n)] (u)Exercise 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. Regulation of Option Trading.

‘Sec. 26. Fraudulent Transactions.

‘Sec. 27. Insider's Duty to Disclose When Trading.


objectives and purposes of these laws, RULES AND
REGULATIONS.”

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

"Sec.6. Indemnification and =‘ Responsibilities of
Commissioners. -6.1. x x x.

6.2. The CURRENT AND FORMER Commissioners, officers
and employees of the 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..100¢

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, DIRECTORS
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. xx x.

10.3 Any person applying for exemption under this Section shal
Hl
fle AN APPLICATION FOR EXEMPTION with the Commission,

9


STATING THE GROUNDS THEREFOR. THE EXEMPTION SHALL
TAKE EFFECT ONLY AFTER THE COMMISSION APPROVES THE
APPLICATION AND THE APPLICANT PAYS THE PRESCRIBED[e
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. 20%

42.3, The information required for the registration of [any kind,
and all] securities, shall include, among others, the effect of
their{securities issueJISSUANCE on THE ownership, [on the mix of
ownership, especially foreign and local ownership]STRUCTURE 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]JAND THE corporate secretary [or persons
performing similar functions].SUCH DULY SIGNED REGISTRATION
STATEMENT SHALL BE accompanied by a duly verified resolution of
the ISSUER'S board of directors [of the issuer corporation. The] 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
shareholdersJREPRESENTATION OR INFORMATION PROVIDED
BY THEM INTHE 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 shail 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

10


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 J”

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

“Chapter [V] IV
Reportorial Requirements

Sec. [17] 16. Periodic and Other Reports of issuers; CORPORATE
RESPONSIBILITY FOR REPORTS. -{17.1] 16.1. Every issuer
‘satisfying the requirements in Subsection [17.2] 16.2 hereof shall file
with the Commission: x x x

{17.2]16.2. 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 to Subsection [17.1] 16.1
hereof shall 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.

Xxx

46.7. 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;

MATERIAL, THAT INVOLVES MANAGEMENT OR
OTHER EMPLOYEES WHO HAVE A SIGNIFICANT
ROLE IN THE ISSUER'S INTERNAL CONTROLS;

(c) 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 [17.2]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
such 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
‘wom 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,

(b) If the purpose of the purchases or prospective
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;

(c) 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: (i) such
person, and (ii) 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. — [19.1]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 ofJa 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 Jeast [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[,] 2 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 tender offer or
requesting or inviting letters 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.

x0e


12. Sections 20to 22 are hereby renumbered as Sections
19 to 21 accordingly.

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 [o]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 after the
close of each calendar month thereafter, if there has been a change in
such ownership during such month, shail 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.

[23.2]22.2. 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 fall or refuse to bring such suit within sixty (60) days
after request or shall fail diligently to prosecute the same thereafter,
but no such suit shall be brought more than two (2) years after 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

15


within five (5) days after such sale deposit it in the mails or other 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 [23.3}22.3 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.

‘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. xxx

[28.4] 274. The Commission shall promulgate rules and
regulations prescribing the qualifications for registration of each
category of applicant, which shall, among other things, require as 8
condition for registration that:

(a) If a natural person, the applicant satisfactorily passES @

written examination as to his proficiency and knowledge in the
area of activity for which registration is sought:

SECTION 16. Section 29 is hereby renumbered as Section 28.


vice-president, manager, 5
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 Functions of
Members, Brokers and 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 unlawful]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-lot
transactions;

(c) Any transaction to offset a transaction made in error, and
x0t

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

“Sec. [85] 34.Adcitional Fees of Exchanges. - In addition to the
registration fee prescribed in Section [33] 32 of this Code, every
Exchange shall pay to the Commission, [on a semestral basis] on or
before the tenth day[ofJAFTER the end of every semester of the
calendar year, 2 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
privilege of doing business[] during [the preceding calendar
year]JSUCH SEMESTER or any part thereof.”

7


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 DISQUALIFICATIONSFOR
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-] Any corporation with a class of
equity securities listed for trading on an Exchange or with assets [in
excessJof 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 to the
public pursuant to 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 Jeast{twenty percent (20%)JTHIRTY PERCENT (30%) of
the members of such board, whichever is [the lesserJhigher, 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
@ 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 agency 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:

(a) 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
eee
vox

[42.5] 41.5. Section[32]310f 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:
42.4.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 UNCERTIFICATED OR SCRIPLESS
FORM; PROVIDED, HOWEVER, THAT PROOF OF OWNERSHIP OF
SHARES OTHER THAN IN SCRIPLESS FORM MAY BE ISSUED BY
JHE CORPORATION UNDER SUCH TERMS AND CONDITION AS
THE COMMISSION MAY PRESCRIBE.

[(@) 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 the rights of the securities intermediary
subsequently to require the corporation to issue a certificate in
respect of any shares recorded in its name; and

(b) If so provided in its articles of incorporation and by-
laws, 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.]

xxx

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

19


ceilings on shareholdings prescribed under pertinent banking laws and
es

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:

70

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:


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
Deventer ct -hatie fer ree ein) precieea eee
before the proper court: Provided, That in instances
See oe ee eee eget Gwe cael ro msemron 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

Lier hr For the purpose of any such investigation, or any other
PROVISION under this Code, OR OTHER
APPLICABLE ELAWS. RULES AND REGULATIONS, the Commission
or any officer designated by it is empowered to administer oaths and
affirmations, witnesses, compel attendance AND/ORTHE
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.

21


THE COMMISSION SHALL HAVE THE RIGHT TO KEEP IN ms
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. — [64.1] 53.1 If, after due
notice and hearing, the Commission finds that: (a) There is 2 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 @ 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:

(i) Suspension, or revocation of any registration for the
offering of securities;

(ii) A fine of not less than [Ten thousand pesos
(P10,000.00)]ONE HUNDRED THOUSAND PESOS
(P100,000.00)nor more — than [One million pesos
(P1,000,000.00)]FIVE MILLION PESOS (P5,000,000.00)pius


not more than [Two thousand pesos (P2,000.00)JFIVE
THOUSAND PESOS (P5,000.00)for each day of continuing
violation;

(iii) In the case of a violation of Sections 16, [19.2] 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;

(iv) 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

(V) 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

(1 (VNOther 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
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
EXECUTION.NO 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. Sections 55 to 62 are hereby renumbered as Sections
54 to 61 accordingly.

SECTION 32. Section 63 is hereby renumbered as Section 62 and
amended to read as follows:

23


“SEC. [63] 62. Amount of Penalties, Damages and Fines to be
Awarded. - [63.1] 62.1. xxx

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 (PHP100,000.00)
AND SHALL BE DOUBLE THE AMOUNT OF THE TRANSACTION
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
EXCEEDTREBLE 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 SELF-
REGULATORY ORGANIZATION, THE PENALTY SHALL NOT
EXCEED TREBLE THE AMOUNTS SPECIFIED ABOVE.

62.5. PENALTIES IMPOSED UNDER SUBSECTION 624
SHALL BE PAYABLE TO THE TREASURY EXCEPT AS
OTHERWISE PROVIDED IN SUBSECTION 62.6 and 627.

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

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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
WHISTLEBLOWERS WHO VOLUNTARILY PROVIDED ORIGINAL
INFORMATION 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
OF THE CIVIL ENFORCEMENT ACTION, (B) THE DEGREE OF
ASSISTANCE PROVIDED BY THE WHISTLEBLOWER 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 WHISTLEBLOWER 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 WHISTLEBLOWER 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

(D)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 DOCUMENTS/RECORDS RECEIVED FROM A FOREIGN
SECURITIES REGULATOR —

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[66.5] 68.5 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 lawS, 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 SECURITES 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:

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“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 out 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 goveming 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
ay m

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 shail 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

27


purposes of its rules or regulations, the Commission may classify
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.

0K

[72.3]71.3. For the purpose of Subsection [72.2] 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 shail be deemed to be a
purchase by the issuer for the purpose of some or ail of the provisions
of Subsection [72.2] 71.2

“[72.4] 71.4 The rules and regulations promulgated by the
Commission PURSUANT TO THIS CODE shail be published in [two
(2A NATIONAL newspaper[s] of general circulation in the
Philippines, and unless otherwise prescribed by the Commission, the
same shall be effective fifteen (15) days after the date of the last

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

registration
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
|, 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

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

28


“Sec. [74] 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 industry as provided in Section 16] of this Code.

xt

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 (PHP500,000.00) TO TEN MILLION PESOS
(PHP10,000,000.00) AND/OR IMPRISONMENT OF FIVE (5) TO
TWENTY (20) YEARS, AT THE DISCRETRION 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 (PHP500,000.00) TO ONE MILLION PESOS
(PHP1,000,000.00) AND/OR IMPRISONMENT OF FIVE (5) TO TEN
(10) 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. Effectivity Clause. - This Act shall take effect fifteen (15) days
after its complete publication in the Official Gazette or in at least two (2)
newspapers of general circulation, whichever date comes earlier.

Approved.

30