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CODE
I. STATE POLICY (PURPOSE)
Nature of the Securities Regulation Code (SRC)
The SRC is enacted to protect the public from
unscrupulous promoters, who stake business or
venture claims which have really no basis, and sell
shares or interests therein to investors.
State policies with regard to the SRC
1. Establish a sociallyconscious market that
regulates itself
2. Encourage widest participation of ownership
in enterprises and enhance democratization of
wealth
3. Promote development of capital market
4. Protect investors and ensure full and fair
disclosure about securities
5. Minimize, if not totally eliminate, insider
trading and other fraudulent or manipulative
devices; and practices which distorts the free
market
II. POWERS AND FUNCTIONS OF THE
SECURITIES
AND EXCHANGE COMMISSION (SEC)
1. Regulatory
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 concerning the securities market;
c. Advise Congress and other government
agencies on all aspects of the securities market
and propose legislation and amendments
thereto;
d. Approve, reject, suspend, revoke or require
amendments to
registration statements, and registration and
licensing applications
e. Regulate, investigate or supervise the
activities of persons to ensure compliance
f. Supervise, monitor, suspend or take over the
activities of exchanges, clearing agencies and
other SROs
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. Deputize any and all enforcement agencies of
the Government as well as any private
institutions
j. Compel the officers of any registered
corporation or association to call meetings of
stockholders or members
k. Suspend, or revoke, after proper notice and
hearing the franchise or certificate of
registration of corporations, partnerships or
associations
l. Exercise such other powers as which are
incidental to the primary powers of the
Commission
2. Adjudicative
a. Issue cease and desist order
b. Punish for contempt of the Commission,
both direct and
indirect
c. Issue subpoena duces tecum and summon
witnesses to appear in any proceedings of the
Commission
d. 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.
C. FRAUDULENT TRANSACTIONS
1. Obtaining money or property by means of
any untrue statement of a material fact
2. Engaging in any act, transaction, practice or
course of business, which operates as a fraud
or deceit upon any person.