I. What are securities?
Earning
HI THERE! I am (Insert Name) and I will walk you through the
world of securities. OHHH NOO!! Not that kind of security!!!
The security of that I am talking about is about the secret of the
rich! The secret of ownership! Let us begin!
You may find numerous definitions of Securities in the internet,
books or other resources.
But our law simply defines Securities your shares, participation
or interest in a corporation or in a commercial enterprise or
profit-making venture.
Simply stated, securities represent your part! Your cut!
It is evidenced by a certificate, contract, instrument, whether
written or electronic in character.
Yes, you heard it right it can be printed or virtually
presented to you! Beauty of technology!
Generally speaking, we have two forms of traditional securities.
They are EQUITY SECURITIES AND DEBT SECURITIES!
First form is equity securities. Equity securities are the
representation of your ownership right. In other words, it
represents your control and influence over the corporation,
commercial enterprise or profit-making venture.
Most common example of equity security is shares of
stock. It represents your ownership of the whole
corporation. Know you know!
Second form is debt securities. Debt securities are the
representation of the loan you lend to a corporation, commercial
enterprise or profit-making venture. Here, you earn through
interest from the principal you lend. Sounds nice right?
without a sweat.
II. What law governs securities?
Why Hello there! Have you ever thought about investing your
hard earned money? Or perhaps your savings from your daily
allowance? But you don’t have any idea on what to
do?!🤷🤷♀️and where to bring it?!🤷🤷
LET ME HELP YOU WITH THAT. I’m (name of speaker) and
we will be talking about the Securities Regulations Code as
well as the Rules and Regulations. This is the law that will
govern your future investment on stocks and securities
See?! We havent even started yet and you already have an
Idea on what to do for your money to grow!
So come on, join me as we tackle this law and its rules!
After all, rules are made to be broken! Kidding. (HEHE, tatawa
dapat ng nakakatuwa si speaker)
__________________________________________________
_____
Let’s begin!
First we need to find out when the Securities and Regulations
was born?
Of course, who wouldn’t like to get to know someone first
before going to the next level 🤷 if ya know what i mean (hehe
ulit)
For investors, securities can be good investing opportunities to
earn profit and increase their wealth. For companies, those
securities can be used to encourage more injection of money
or capital into their businesses.
HEY! DONT FORGET! Laws can be beneficial for the
Government too!
The trading of securities in the market requires regulation that
will ensure the protection of everyone who participates in it.
That is why Republic Act No. 8799, known as The Securities
Regulation Code of the Philippines was enacted by Congress.
You can call it SRC for short. After all, no one likes it when
they get called by their full name. [[[[ joke banat kunyare puta
corny pero parang metaphor e Maria Isabel Lucille Trina
Beatriz Consuelo Apan (hahaha random long name) or Bea for
short]]]]
It was enacted and approved on JULY 19,2000. It can also be
said to be somewhat similar to the Securities and Regulations
Code in the USA, which is the pattern for our own local code.
Seems like we really love the work of Americans, from music,
to fashion and even laws OMG! (Hehe ulit)
Are you forgetting something? ohhhh We haven’t talked about
how to implement this law haha. How can you use this law for
your financial benefit if you dont how to apply it? Hey,
remember! Those details inside your brain will be useless if
you dont know how to apply it!
Time to talk about the Implementing Rules and Regulations for
the SRC. Or the IRR for short.
The IRR primarily aims to efficiently and effectively implement
the SRC. It seeks to give the readers the specified limitations,
methods, ceiling, etc. that readers may use and avail of in
using the provisions of the SRC for their own benefit and
interest.
III. Why is there a law in the first place?
The answer is not that difficult unlike enumerating and defining all
these kinds of secuties found in the Securities Regulation Code
(SRC).
The spirit of this law is towards transparency and liberalization of
trading rules for both the sellers and buyers.
The Code's Declaration of State Policy tells us three (3) most
important State objectives we should remember:
First, that the "State has the duty to establish a free market that
regulates itself".
- What does this mean? Well, just imagine yourself saying this to the
State: "Hands off please".
- This is where the State stops to interfere with matters that only
businesses understand and let them explore towards attaining full
development without fear of being sanctioned or limited by the laws
being enforced by the State.
Second, "State shall observe and ensure full and fair disclosure
about securities"
- When we say Securities and Regulations Code, we say
"DISCLOSURE STATUTE". The Code is essentially a "disclosure
statute". Under the full disclosure regime, the regulator has no
authority to decide whether the security may be offered but it may
insist that the material facts be fully shown to the general public.
The material facts are those information about the security trading
which could possibly influence the decision of an investor or change
the market price of the securities.

Third, "State shall protect investors".
The investors are the most vulnerable parties because they are less
knowlegeable on how the securities trading work. To protect them
from those who are knowledgeable and wanted to abuse the same,
the Code contains " anti-fraud provisions" against price
manipulations and insider trading. Different kinds of manipulative
and deceptive practices are governed under the Chapter 7 of this
Code to make sure that no act or omission violating this Code will
remain unpunished.
IV. What does the law seek to accomplish?
Speaker 1: The Securities Regulation Code was created for a
reason — it wants to protect investors, and the general public!
Imagine buying stocks blind, not knowing who issued them, or
whether you’re part of a fraudulent transaction that proves a
disadvantage to other innocent purchasers like you. When you
buy a brand new gadget, you wanna know if it’s worth your
money. As the millennial parlance goes - IS THIS LEGIT?
Speaker 2: That’s right. We can divide into three aspects the
goals which our law has: to have (a) self-regulating free
market; (b) fair disclosure of information; and (c) minimize, if
not eliminate, insider trading.
Hence, one of the primary goals of the SRC is to provide
protection to the general public against unscrupulous and
fraudulent transactions governing securities. Since the SRC is
considered a disclosure statute, the law requires - you
guessed it - disclosure of relevant matters with regard to
securities transactions. Transparency is key!
Speaker 1: The law also achieves its goals through registration
- now, this concerns the issuer of the security. This ensures the
availability of adequate information about the issuer, as well as
the securities themselves, which are offered to the public. This
is important because on this information depends the buyer’s
decision whether to buy or not to buy securities, like stocks.
Speaker 2: The law also contains anti-fraud provisions to
prevent price manipulations and insider trading on the basis of
non-public (undisclosed!) information. Guys, the law
recognizes that there might be people who could be buying
stocks from the backdoor. Not to throw shade, but these
transactions are shady AF.
V. What are the steps the law undertakes to
accomplish its goals?
As I/We have mentioned, Securities Code is a disclosure law.
Meaning, any form of secret that can result to fraud is a big NO! NO!
This law wants TRANSPARENCY!
To prevent this, the it imposes the obligation to register all securities
before it can be offered to the public. It not only gives the public,
especially potential investors like YOU, the right to examine these
securities, but as well as to obligate the issuers/traders/sellers to be
transparent in their dealings!
No secrets and skeletons inside the closet, Yes?
Now are we done? Nope. Not just yet! Because it does not simply stop
there as the law also wants CONSISTENCY!
To further ensure the continuous flow disclosure and information
with regard to these securities, the law also obligates the
issuer/seller/trader of the securities to make reportorial
requirements. By this, they are also obligated to make constant
reports on the information of the securities in the market.
 Number 2. A prospectus must also be submitted to the SEC.
TRANSPARENT. CONSISTENT.
Wait, what does prospectus mean? I have never heard of that
the law only wants the best protection and does not want YOU TO BE before. And what is it for?
TAKEN ADVANTAGE OFF. Regardless whether your knowledge to
trading is none at all or an expert trading investor, you are SAFE. YOU Basically, a prospectus includes the name of the company, a
ARE PROTECTED. Every information needed is already on the table! summary of the company’s financial background, and the type
of security or securities it wants to sell to the public. Well, a
prospectus is necessary because it helps the public to be
FRAUD FREE, BEYOND SAFE SECURITIES.
informed about a company before it decides to invest in such
company.
So after knowing about what a security is, you guys may already
want to invest in securities as you can really earn a lot and even
Think of it this way… Imagine that the corporation is your suitor
become rich! But before you invest in any security, always
and you are the investor. So your suitor-corporation wants to put
remember to research about the company’s background first.
its best foot forward by showing its amazing background through
a document called “prospectus”. And then you examine its
You may also want to ask yourselves: Can a corporation
prospectus and decide whether you want to pursue a long-term
automatically sell securities to the public? What do you think?
investment relationship, short-term investment relationship, or
even reject it at all (which is quite painful for your suitor’s part of
Of course the answer is NO! Because you have to register the
course LOL).
securities first with the SEC before selling them to the public!
Number 3. After complying with the first two requirements, the
So… How do corporations register a security?
applicant corporation shall pay a filing fee to the SEC. The filing
fee should not be more than 1/10 of the price of the security it
Now, guys, don’t get intimidated as we will not give you a long
wants to sell to the public. For example, if the total price of the
and boring list of documents! We are going to briefly explain to
shares of stock a company wants to sell to the public is
you the step-by-step procedure in registering securities with the
P1,000,000, the company shall pay an amount not more than
SEC.
P100,000 to the SEC.
Number 1. The authorized representative of the applicant
Number 4. The applicant shall publish the notice of the filing of
corporation should accomplish the registration statement or the
the registration in two newspapers of general circulation in the
SEC Form 12-1. The form is available on the SEC website so
Philippines, once a week for two consecutive weeks. The
you can just download and print it. The authorized
applicant shall be the one to shoulder the expenses for the
representative should also have the form notarized by the notary
publication.
public. Three copies of the form and the supporting documents
must also be submitted to the SEC.
So what happens next after the company has complied with
these requirements?
Philippines. In addition to its regulatory functions, the SEC also
After 45 days from filing of the registration, the SEC shall decide maintains the country's company register.
as to whether the company’s registration of the security is
granted or rejected. The SEC may also allow the applicant to
amend its registration. So, what exactly is their function?

Now, we have explained the step-by-step procedure in

Its major functions include registration of securities, analysis of
registering securities.
every registered security, and the evaluation of the financial
Wow, I never thought that the entire procedure is
straightforward. condition and operations of applicants for security issue. So
basically, the Securities and Exchange Commission aims to
Well, we’re here to educate everyone about the basics of
investing in securities. That’s the reason why we’re here to protect creditors and customers. It requires that brokers
simplify the entire procedure for you. Happy investing!!! ☺
comply with liquidity standards and are registered with SEC.

VI. What is the SEC?
 Here’s a trivia:
Did you know that before investors who wish to set up Since 1981, the SEC has five commissioners.
corporations, associations or partnerships in the Philippines,
Currently, the commissioners are:
they must first register their businesses with the Securities and
Exchange commission (SEC)?
CHAIRMAN EMILIO B. AQUINO
COMMISSIONER ANTONIETA F. IBE
Yes, you heard it right! But, what is the Securities and
COMMISSIONER EPHYRO LUIS B. AMATONG
Exchange Commission?
COMMISSIONER JAVEY PAUL D. FRANCISCO
The Securities and Exchange Commission, commonly known COMMISSIONER KELVIN LESTER K. LEE
as SEC, is the agency of the Government of the Philippines
And, that’s it! I hope you learned a lot. Thank you for watching!
responsible for regulating the securities industry in the