The Securities Regulation Code establishes rules for regulating securities transactions in the Philippines. It was enacted in 2000 and divides regulations into 13 chapters covering topics like insider trading, market manipulation, and disclosure requirements. The code aims to protect investors, encourage stock ownership, and promote fair securities markets. Key provisions address registration of securities offerings, prohibitions on fraudulent or manipulative practices, and restrictions on trading by corporate insiders using non-public information. Violations can lead to civil and criminal penalties including large fines and imprisonment.

1. SECURITIES
REGULATION CODE
R.A. 8799

2. • Enacted on July 19, 2000
• Amended in 2015
• Divided into 78 sections and classified into 13 chapters

3. ✓ Shares of stocks, bonds, debentures
✓ Investment contracts
✓ Options and warrants
✓ Certificates (assignment, participation,
trust, etc.)
✓ Proprietary and non-proprietary
membership certificates
✓ Other instruments as may in the future be
determined by the Commission

4. corporations
Domestic governments Foreign governments
Investment trusts

5. BROKERS DEALERS
agents who
buy and
sell
securities
for others
buy and sell
securities
for
themselves

7. Objectives of Securities Regulation Code
To establish a
socially aware and
self-regulating free
market
To encourage
more participation
in owning an
enterprise
To enhance the
democratization
of wealth
To promote the
capital market’s
development
To protect investors
by ensuring full and
fair disclosure of
securities
To minimize or
eliminate fraudulent
activities such as
insider trading in the
free market

9. a person who has access to material
nonpublic information about the company or
the security that is not generally available to
the public
✓ Management
✓ Directors
✓ Government agencies
✓ other people who learn of such
information by communication from the
preceding persons

10. “information that has not been disclosed to the public and
would either likely affect the market price of the security
when disseminated to the public or would be an important
consideration by a reasonable man to either buy, sell or hold
certain security”

11. “trading security with the knowledge
of nonpublic material information.”
An insider may still trade if:
✓ he proves that the information was not
gained from his connection or function
✓ he proves that the person he transacts
with is aware of the non-material
information

12. It is unlawful for any person:
❖To create false or misleading appearance of
active trade on any listed security in an
Exchange or any other market:
• By effecting any transaction in such security which
involves no change in the beneficial ownership
• By participating in the sale or purchase of such
security with the insider knowledge of other involved
parties
• By performing similar acts where there is no change in
beneficial ownership

13. ❖To circulate information that the price of any security listed
in an Exchange will or is likely to rise or fall because of
manipulative market operations
❖To effect a series of transactions in securities:
• Raises their price to induce the purchase of security
• Depresses their price to induce the sale of a security
❖To make false or misleading statements with respect to
any material fact to induce the purchase or sale of any
security

14. • Employ any device, scheme, or artifice to defraud;
• Obtain money or property by means of any untrue
statement of a material fact of any omission to state
a material fact necessary in order to make the
statements made, in the light of the circumstances
under which they were made, not misleading; or
• Engage in any act, transaction, practice or course of
business which operates or would operate as a fraud
or deceit upon any person.

15. ❑ Painting the tape
❑ Marking the close
❑ Improper matched orders
❑ Wash sales
❑ Squeezing the float
❑ Hype and dump
❑ Short and distort
❑ Disseminating false or misleading market information through
media, including the internet, or any other means to move the
price of a security in a direction that is favorable to a position held
or a transaction

16. “engaging in buying activity at increasingly
higher prices and then selling the securities
at a higher price in the market.”
a group of persons will spike up the share price by trading
among themselves. When the public is already enticed to buy
the security, hoping that the price will go higher, the person
or group of persons will then dump the security to the
public, at the already pumped up higher price.

17. • fine of not less than P50,000 nor more than
P5 million
• imprisonment of not less than seven years
nor more than 21 years, or both, for every
violation.

19. Shall not be sold or offered for sale or distribution within the
Philippines, without a registration statement duly filed with
and approved by the Commission. Prior to such sale,
information on security made available to each prospective
purchaser.
A primary means of protecting the investing public is the
disclosure of the important financial information through
the registration of securities which enables investors to
make informed judgments.

20. All companies, listed or applying for listing, are
required to divulge truthfully and accurately, all
material information about themselves and the
securities they sell for the protection of the investing
public pain of administrative, criminal and civil
sanctions

21. Section 30 prevented the unfair use of non-
public information in securities transactions
Section 36 monitor the transactions entered
by corporate officers/directors regards the
securities of their companies.
Promote full disclosure in the securities market and
prevent unscrupulous individuals, who by their positions
obtain non-public information by taking advantage of the
uninformed public.

23. 1) False registration statement
2) In violation of registration requirements
3) Fraud in connection with securities transaction
4) Manipulation of security prices
5) Commodity futures contracts and pre-need plans
6) By mean of prospectus or communication with untrue statement
7) Insider trading