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Republic
Act 8799, otherwise known as the Securities Regulation
Code (SRC), was enacted in July 2000 to express three
essential objectives, specifically: to protect of the
investing public; to guarantee or ensure that markets
are fair, efficient and transparent; and to minimize
systemic risks in the world market.
Section
2 of the SRC enunciates in clear terms the state policy
to be achieved when it categorically declares that the
State shall establish a socially conscious free market
that regulates itself. The State shall likewise
encourage the widest participation of ownership in
enterprises, enhance the democratization of wealth,
promote the development 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.
This state policy is the very basis of the
interpretation of the SRC rules to the effect that any
doubt in its interpretation shall be resolved by the
Securities and Exchange Commission (SEC) in the manner
which would establish a free market, observe free
disclosure on securities and protect investors.
In order
to strengthen the SEC’s role as the corporate watchdog
in the securities market, certain significant features
of the SRC include provisions which make the SEC the
administrative agency that shall administer and
implement the SRC. Likewise, the registration of
securities with the SEC is mandated to assure that
information is readily available to the public. The
obligation and responsibility of corporations and other
covered entities to submit reportorial requirements for
the continued flow of disclosures and information is
likewise mandated.
Moreover, the SRC contains and includes provisions to
counteract and finally respond to price manipulations,
insider trading, and different misstatements or
misrepresentations by corporate officials and other
antifraud rules. The SRC also recognizes the important
role to be played by market players in their quest for
self-regulation. To give bite to the provisions of law
in the SRC, penalties or sanctions for its violation,
including civil and administrative liabilities as well
as award of damages to investors injured by the
violations thereof, are likewise included.
In all
this, the primordial consideration is the protection of
the investors. This process starts at registration and
compliance with the full disclosure regime as to
information, regulation of securities market participant
and ends with the enforcement provisions. In this
regard, it can be gainsaid that with the investing
public having full assurance in the best practices of
the securities market, the admonition found in the state
policy enshrined in the SRC of promoting full capital
market development, will see full attainment.
In our
succeeding columns, we shall endeavor to go into more
detail over significant provisions of the SRC that may
affect a large segment of the population. |
