Republic of the Philippines

House of Representatives
Queson City, Metro Manila

EIGHTEENTH CONGRESS
First Regular Session

4177
H.B.No.

Introduced by Representative TEODORICO “NONONG" T. HARESCO, JR.

AN ACT.
AMENDING SECTION 5 OF REPUBLIC ACT NUMBER 8799, OTHERWISE KNOWN
AS THE SECURITIES REGULATION CODE, HARMONIZING THE SAME WITH
SECTION 29 OF REPUBLIC ACT NUMBER 8791, OTHERWISE KNOWN AS THE
GENERAL BANKING LAW OF 2000, AND FOR OTHER PURPOSES

EXPLANATORY NOTE

The Securities Regulation Code states that one of the powers and functions of the
Securities and Exchange Commission (SEC) is to “formulate policies and recommendations
on issues concerning the securities market (Chapter II, Sec. 5(b)).” On the other hand,
Sections 23 and Sec. 29 of Republic Act Number 8791 or the General Banking Laws of 2000
states that universal and commercial banks have the inherent banking power to deal in
marketable bonds and other debt securities. The same law along with Republic Act No. 7653
or the New Central Bank Act, as amended, placed banks under the regulatory supervision of
the Bangko Sentral ng Pilipinas (BSP).

In 2005, the SEC granted Self -Regulatory Organization (SRO) status to the Philippine
Dealing and Exchange Corporation (PDEx) over all transactions involving government
securities as part of capital market reforms instituted after the 1997 Financial Crisis. It was
envisioned that PDEx would transform into a Fixed Income Exchange (FIE).

Since it is but natural for Banks to trade in securities, government securities included,
this created problems as to which jurisdiction the regulation of Banks fall. This amounted to
overlap in regulatory functions between the BSP and the SEC through the PDEx. This bill
seeks to correct this ambiguity and reaffirm the BSP’s regulatory powers over banks
removing them from the SEC.

Wherefore, the immediate passage of this bill is earnestly sought.

HON. TEODORICO “NONONG? T. HARESCO, JR.

Representative
24 District, Province of Aklan


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EIGHTEENTH CONGRESS OF THE
REPUBLIC OF THE PHILIPPINES
First Regular Session

4177
H.B. No.

Introduced by Representative TEODORICO “NONONG" T. HARESCO, JR.

AN ACT
AMENDING SECTION 5 OF REPUBLIC ACT NUMBER 8799, OTHERWISE
KNOWN AS THE SECURITIES REGULATION CODE, HARMONIZING THE
SAME WITH SECTION 29 OF REPUBLIC ACT NUMBER 8791, OTHERWISE
KNOWN AS THE GENERAL BANKING LAW OF 2000, AND FOR OTHER
PURPOSES

Be it enacted by the Senate and House of Representatives of the Philippines in Congress
assembled:

SECTION 1. Section 5, Chapter II of Republic Act Number 8799 is hereby
amended to read, as follows:

“CHAPTER II
SECURITIES AND EXCHANGE COMMISSION

“Section 4. Administrative Agency. ~ 4.1. xxx.

“42.

HOXX.

“Section. 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, residential 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:

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

(6) Formulate policies and recommendations on issues concerning the
securities market, advise Congress and other government agencies on all
aspects of the securities market and propose legislation and amendments
thereto;


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

(d) Regulate, investigate or supervise the activities of persons to ensure
compliance;

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

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

(g) 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) 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;

(i) Issue cease and desist orders to prevent fraud or injury to the investing
public;

() Punish for the contempt of the Commission, both direct and indirect, in
accordance with the pertinent provisions of and penalties prescribed 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 to the provisions of existing laws;

(m) 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; and

(n) Exercise such other powers as may be provided by law 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
objectives and purposes of these laws.

5.2 THE POWERS AND FUNCTIONS GRANTED TO THE COMMISSION
UNDER THIS LAW DO NOT ENCOMPASS REGULATION OVER THE
ACQUISITION OF MARKETABLE BONDS AND OTHER DEBT SECURITIES
GRANTED TO UNIVERSAL AND COMMERCIAL BANKS UNDER
SECTION 29 OF REPUBLIC ACT 8791, OTHERWISE KNOWN AS THE
GENERAL BANKING LAW OF 2000.


5.3. The Commission's jurisdiction over all cases enumerated under Section 5 of
Presidential Decree No. 902-A is hereby transferred to the Courts of general
jurisdiction or the appropriate Regional Trial Court: Provided, That, the Supreme
Court in the exercise of its authority may designate the Regional Trial Court
branches that shall exercise jurisdiction over these cases. The Commission shall
retain jurisdiction over pending cases involving intra-corporate disputes
submitted for final resolution which should be resolved within one (1) year from
the enactment of this Code. The commission shall retain jurisdiction over pending,
suspension of payments/ rehabilitation cases filed as of 30 June 2000 until finally
disposed.

SEC. 2. Separability Clause. - If any provisions of this Act or the application of such
provision to any person or circumstances be declared unconstitutional, the remainder of
this Act or the application of such provision to other person or circumstances shall not be
affected by such declaration.

SEC. 3. Repealing Clause. - All laws, decrees, proclamations, executive orders, rules and
regulations or other issuances or parts thereof contrary to inconsistent with the
provisions of this Act are hereby repealed, amended or modified accordingly.

SEC. 4. Effectivity. ~ This Act shall take effect fifteen (15) days after its publication in the
Official or in at least two (2) national newspapers of general circulation.

Approved,