IMPLEMENTING RULES & REGULATIONS OF THE SECURITIES REGULATION CODE

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SECURITIES AND EXCHANGE COMMISSION
SECURITIES INVESTIGATION AND CLEARING DEPARTMENT
SEC Building, EDSA, Greenhills, City of Mandaluyong

IMPLEMENTING RULES AND REGULATIONS OF THE SECURITIES REGULATION CODE
(Republic Act No. 8799)

SRC Rule 1
Title of Rules

These Rules shall be referred to as the “Implementing Rules and Regulations of the Securities Regulation Code”, or SRC Rules.

SRC Rule 2
Interpretation of Rules

Any doubt in the interpretation of these Rules shall be resolved by the Commission in a manner which would establish a socially conscious free market that regulates itself, encourage the widest participation of ownership in an enterprise, enhance the democratization of wealth, promote the development of the capital market, protect investors, ensure full and timely disclosure of material information, and/or minimize if not eliminate insider trading and other fraudulent or manipulative devices and practices which create distortions in the free market.

SRC Rule 3
Definitions of Terms Used in the Rules and Regulations

1. As used in the rules and regulations adopted by the Commission under the Code, unless the context otherwise requires:

a. Commission means the Securities and Exchange Commission.

b. Code means the Securities Regulation Code.

c. Section refers to a section of the Code.

d. Beneficial owner or beneficial ownership means any person who, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise has or shares: voting power, which includes the power to vote, or to direct the voting of, such security; and/or investment returns or power, which includes the power to dispose of, or to direct, the disposition of such security; provided, however, that a person shall be deemed to have an indirect beneficial ownership interest in any security which is:

i. held by members of his immediate family sharing the same household;

ii. held by a partnership in which he is a general partner;

iii. held by a corporation of which he is a controlling shareholder; or

iv. subject to any contract, arrangement or understanding which gives him voting power or investment power with respect to such securities: Provided however, the following persons or institutions shall not be deemed to be beneficial owners of securities held by them for the benefit of third parties or in customer or fiduciary accounts in the ordinary course of business, so long as such shares were acquired by such persons or institutions without the purpose or effect of changing or influencing control of the issuer:

A. A Broker Dealer;

B. An investment house registered under the Investment Houses Law;

C. A bank authorized to operate as such by the Bangko Sentral ng Pilipinas;

D. An insurance company subject to the supervision of the Office of the Insurance Commission;

E. An investment company registered under the Investment Company Act;

F. A pension plan subject to regulation and supervision by the Bureau of Internal Revenue and/or the Office of the Insurance Commission; and

G. A group in which all of the members are persons specified above.

All securities of the same class beneficially owned by a person, regardless of the form such beneficial ownership takes, shall be aggregated in calculating the number of shares beneficially owned by such person.

A person shall be deemed to be the beneficial owner of a security if that person has the right to acquire beneficial ownership within thirty (30) days, including, but not limited to, any right to acquire; through the exercise of any option, warrant or right; through the conversion of any security; pursuant to the power to revoke a trust, discretionary account or similar arrangement; or pursuant to automatic termination of a trust, discretionary account or similar arrangement.

e. Material information means information which a reasonable investor would consider important in determining whether to buy, sell or hold securities, or in connection with the exercise of related voting rights.

f. Control, controlling, controlled by, and under common control with, means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract, or otherwise.

g. Member of an Exchange means any Broker Dealer who has the right, pursuant to Exchange rules, to trade on that Exchange.

h. Transfer agent means any person who engages on behalf of an issuer of securities, or itself as an issuer of securities, in:

i. countersigning such securities upon issuance;

ii. monitoring the issuance of such securities with a view toward preventing unauthorized issuance, a function commonly performed by a person called a registrar;

iii. registering the transfer of such securities;

iv. exchange or converting such securities; and/or

v. transferring record ownership of securities by bookkeeping entry without physical issuance of securities certificates.

i. Public company means any corporation with a class of equity securities listed on an Exchange or with assets in excess of Fifty Million Pesos (P50,000,000.00) and having two hundred (200) or more holders, at least two hundred (200) of which are holding at least one hundred (100) shares of a class of its equity securities.

j. Self Regulatory Organization or SRO means an organized Exchange, registered clearing agency and any organization or association registered as an SRO under Section 39 of the Code to enforce compliance with relevant provisions of the Code and rules and regulations adopted thereunder, and mandated to make and enforce its own rules, which have been approved by the Commission, by their members and/or participants.

k. Rules and regulations refers to all rules and regulations adopted by the Commission pursuant to the Code, including the forms for registration and reports and accompanying instructions thereto.

2. Unless otherwise specifically stated, the terms used in the rules and regulations shall have the meanings defined in the Code.

3. A rule or regulation which defines a term without express reference to the Code or to the rules and regulations, or to a portion thereof, defines such term for all purposes as used in both the Code and in the rules and regulations, unless the context otherwise specifically requires.

SRC Rule 3.1-1
Definition of Investment Contract and Derivative

1. An investment contract means a contract, transaction or scheme (collectively “contract”) whereby a person invests his money in a common enterprise and is led to expect profits primarily from the efforts of others.

a. A presumption that a contract is an investment contract arises whenever a person seeks to use the money of others on the promise of profits.

b. When two or more investors “pool” their resources, there is a common enterprise, even if the promoter does not do more than receive a broker’s commission.

2. Derivative with respect to equity securities, means a financial instrument, including options and warrants, whose value depends on the interest in or performance of an underlying security, but which does not require any investment of principal in the underlying security.

a. Options are contracts that give the buyer the right, but not the obligation, to buy or sell an underlying security at a predetermined price, called the exercise or strike price, on or before a predetermined date, called the expiry date, which can only be extended in accordance with Exchange rules.

b. Call options are rights to buy and put options are rights to sell.

c. Warrants are rights to subscribe or purchase new shares or existing shares in a company, on or before a predetermined date, called the expiry date, which can only be extended in accordance with Exchange rules. Warrants generally have a longer exercise period than options.

SRC Rule 3.3-1
Definition of Broker Dealer

Broker Dealer means any broker and/or dealer registered under Section 28 of the Code to engage in broker and/or dealer activities.

SRC Rule 3.6
Definition of Clearing Agency

1. Clearing agency means any person that provides a facility to a Broker Dealer, salesman, associated person of a Broker Dealer or another clearing agency and whose facility performs any or all of the following activities:

a. makes deliveries in connection with transactions in securities;

b. reduces the number of settlements of securities transactions or to allocate securities settlement responsibilities;

c. provides for the central handling of securities so that transfers, loans, and pledges and similar transactions can be made by bookkeeping entry or otherwise to facilitate the settlement of securities transactions without physical delivery of securities certificates.

2. As used in this Rule, “facility” includes a clearing agency’s systems, processes or services and all the tangible or intangible properties necessary to operate such system, processes or services, whether within or without its specific physical location, for purposes of performing any or all of the activities set forth in paragraph 1 of this Rule.

3. A registered clearing agency may perform only the activity or activities that the Commission has previously approved.

SRC Rule 3.7.1
Definition of Facility of an Exchange

Facility of an Exchange includes systems, processes or services, tangible or intangible property, whether or not in a specific physical location or in an Exchange, for the purpose of effecting transactions between buyers and sellers in a securities trading market, and conveying any information required by the participants to effect such transactions.

SRC Rule 4
Securities and Exchange Commission

These Rules shall be implemented by the Commission as a collegial body, composed of a Chairperson and four (4) Commissioners.

1. The Commission shall have five (5) principal departments each to be headed by a director. Its core functions of capital markets regulation shall be performed by the Market Regulation Department, Corporation Finance Department, and Non-traditional Securities and Instruments Department, while its company registration and enforcement functions shall be performed by the Company Registration and Monitoring Department and Compliance and Enforcement Department, respectively.

a. The Market Regulation Department is responsible for developing the registration criteria for all market participants and supervising them to ensure their compliance with registration requirements and endorsing infractions of the Code and rules and regulations to the Compliance and Enforcement Department.

b. The Corporation Finance Department is responsible for registering securities before they are offered for sale or sold to the public and ensuring that adequate information is available about the said securities. It will also ensure that investors have access to all material disclosures regarding the said offering and the securities of public companies. It will likewise monitor compliance by issuers with the Code and rules and regulations adopted thereunder and endorse infractions thereof to the Compliance and Enforcement Department.

c. The Non-traditional Securities and Instruments Department is responsible for registration and licensing of non-traditional securities and instruments including but not limited to pre-need plans, commodity futures contracts proprietary or non-proprietary membership certificates and other similar instruments and for monitoring compliance with related rules and endorsing infractions thereof to the Compliance and Enforcement Department.

d. The Company Registration and Monitoring Department is responsible for the registration of domestic corporations, partnerships and associations, including representative offices and foreign corporations intending to do business in the Philippines. It is also responsible for the supervision and monitoring of such entities relative to their compliance with laws, rules and regulations administered by the Commission.

e. The Compliance and Enforcement Department is responsible for ensuring compliance by all market participants, issuers and individuals, and taking appropriate enforcement action against them for legal infraction of the Code and other relevant laws, rules and regulations implemented by the Commission.

2. The Commission shall have support services departments, namely Human Resource and Administrative Department, Economic Research and Information Management Department and Financial Management Department.

a. The Human Resource and Administrative Department is responsible for all activities relating to personnel and human resource management, including benefits, training and development. It will also handle the central receiving, records management, general administrative and maintenance services of the Commission.

b. The Economic Research and Information Management Department is responsible for providing investment and economic research, analysis and advice to the Commission. It is also the lead technical support group of the Commission for software development, database management, hardware procurement, and establishment and maintenance of a communication network.

c. The Financial Management Department is responsible for the internal financial management of the Commission which includes budgeting, accounting and cash management.

3. The Commission shall have special offices, namely the Office of the General Counsel and the Office of the General Accountant.

a. The Office of the General Counsel, headed by the General Counsel, shall serve as the lead legal adviser to the Commission. It shall also serve as legal liaison for the Commission with other government agencies, self-regulatory organizations, and foreign government regulators and agencies. It shall oversee all non-enforcement litigation and all appeals to the Commission en banc. It shall likewise oversee the office of the Commission Secretary.

b. The Office of the General Accountant, headed by the General Accountant, shall be responsible for providing advice to the Commission and the private sector in the area of accounting standards and on issues of accounting treatment for public offerings and disclosures. It shall also coordinate with any board or council in the development of accounting standards for the Philippines and its capital market.

4. The Commission shall have Extension Offices in key cities, each to be headed by a Director. The Extension Offices shall perform the company registration, supervision, monitoring and other delegated functions of the Commission within its geographical jurisdiction. The Directors are responsible for executing the programs of the Commission in their respective geographical jurisdictions, subject to the supervision of the Commission.

5. The Commission shall hold regular meetings at least once a week on a day and time fixed by it. Special meetings may also be called as often as may be necessary by the Chairperson or upon the request of three (3) Commissioners. In such cases, notice of the meeting shall be given to all Commissioners and the presence of three (3) Commissioners shall constitute a quorum. In the absence of the Chairperson, the most senior Commissioner present shall act as the presiding officer of the meeting.

6. The Commission may, for purposes of efficiency, delegate any of its functions to any department or office of the Commission, an individual Commissioner or staff member of the Commission except its review or appellate authority and its power to adopt, alter and supplement any rule or regulation.

7. The Commission, motu proprio or upon a petition filed by an interested party, may review any order, resolution, decision or action of any of its departments, offices, individual Commissioner, or staff member of the Commission.

The petition for review shall be filed with the Office of the General Counsel within fifteen (15) days from receipt of the order, resolution, decision or any document evidencing the action taken which is the subject of the review. The petition shall contain, among other things, its factual and legal basis and shall be signed by the petitioner or counsel.

SRC Rule 5.1(e)
Clarification of Commission Powers to Take-Over an Exchange

Procedures for implementing the Commission’s power to suspend or take-over an Exchange are set forth in SRC Rule 40.5.1.

SRC Rule 6.2
Rules of Conduct for Commissioners, Officers and Employees

1. The Commissioners, including the Chairperson, officers and employees of the Commission (hereinafter collectively referred to as officers or officer), in the execution of their duties owe their undivided loyalty to the Commission and shall observe the highest standards of honesty, integrity and good faith in the performance of their duties.

a. Officers shall not pursue private activities in any manner which may conflict with their duties and shall subordinate those activities which, although not in conflict with their duties, will require time and effort to the prejudice of their duties at the Commission.

b. Every officer who has discretionary authority shall be free from any conflicting interest or influence of such nature and importance as would make it difficult for him to provide his best efforts and loyalty to the Commission.

2. The interest of officers shall include the interest of his or her spouse, children under the age of eighteen (18) and trusts for the benefit of himself, his or her spouse or children.

3. Officers shall provide the Commission with complete information with respect to any actual or conflicting interest by completing SEC Form 6 and submitting such form to the Commission Secretary no later than thirty (30) days from the effective date of this Rule. New officers shall fill up this form and submit the same to the Commission Secretary thirty (30) days prior to the first day of employment.

4. Even where not specifically required to be disclosed in SEC Form 6, officers shall report any other circumstances which, in their judgment, they regard as being of possible concern to the Commission. It is to such officer’s advantage, as well as the Commission’s, that any unclear situation be reported in order that a policy judgment can be made. Questions of conflict will be referred to the Office of the General Counsel. If the Office of the General Counsel determines that such officer can not properly retain his outside interest or relationship and still be employed by the Commission, the Office of the General Counsel (after advising those to whom the officer reports to of the circumstances) shall require action to eliminate the conflict, such as the disposition by the officer of his conflicting interest or relationship, or the narrowing of responsibilities of the officer.

5. SEC Form 6 shall be kept current and accurate. Any change to the information contained therein shall be reported and filed with the Commission Secretary on SEC Form 6-A no later than ten (10) days from the date of such change.

6. Set forth below is a description of the types of activities which may give rise to a conflict of interest in violation of this Rule and should be disclosed; provided, however, this is not a comprehensive list:

a. All officers, directorships, trusteeships or partnership interests in any organization or association, whether registered with the Commission or not (except charitable and civic organizations).

b. Interest in any securities or investment in any corporation, partnership or association registered under and/or required to report under the Code.

c. The receipt of compensation, wages, bonuses, benefits or privileges with monetary value for services from any corporation, partnership, or association registered with the Commission or from any person or enterprise which, though not registered with the Commission, does business with the Commission as a supplier, contractor or the like.

d. Employment of officers during their term of office or employment with the Commission and for a period of one year after resignation, retirement or separation from such office or employment.

i. employment as an officer, employee, consultant, counsel, broker, agent, trustee or nominee in any person or enterprise regulated by the Commission under the Code;

ii. private practice of their profession where such practice conflicts or tends to conflict with their official function (e.g. where such practice is in connection with any matter before the office of the Commission such officer works in or used to work in);

iii. the recommendation of any person to any position in a private enterprise which has a regular or pending official transaction with their office or the office such officer used to work with.

e. Solicitation or acceptance of any gift, loan, or other benefit from any corporation, partnership or association registered, applying or contemplating registration with the Commission, including any person or firm, though not so registered, applying or contemplating registration and/or having current or prospective dealings with the Commission as a supplier or contractor or the like, if the acceptance would influence or would create the appearance of influencing him to act other than solely in the best interest of the Commission.

i. Any gift having more than a nominal value, even if given on occasions of rejoicing or celebration such as birthdays, anniversaries or Christmas, shall not be permitted.

ii. Each officer should disclose the amount and terms (though not necessarily the purpose) of his personal transactions with any financial or lending individual or firm from which he has incurred loans of more than Pesos 250,000 at any time during the past calendar year, or if he is involved, by virtue of his position, in significant relationships with any financial or lending individual or firm.

iii. No entertainment should be accepted by any officer of a kind or amount which would influence, or would create the appearance of influencing him to act other than solely in the best interest of the Commission.

SRC Rule 7
Periodic Review of Commission Structure

The Commission shall conduct, once every two (2) years, a review of its organization and structure to achieve the goals of the Code and more efficiently and effectively exercise its powers and functions thereunder, without prejudice to its power to conduct yearly merit reviews and provide increases in compensation based on productivity and efficiency.

SRC Rule 8
Requirement to File Registration Statement

1. Filing of Registration Statement and Effectivity of Offering

a. No securities, except of a class exempt under Section 9 of the Code or unless sold in any transaction exempt under Section 10 thereof, shall be sold or distributed by any person within the Philippines unless such securities shall have been registered with the Commission on SEC Form 12-1 and the registration statement has been declared effective by the Commission. Moreover, no securities shall be offered unless a registration statement has been filed with the Commission.

b. If the securities which are the subject of the registration statement are intended to be listed on an Exchange, a copy of the registration statement and all other pertinent documents shall simultaneously be filed with that Exchange. All amendments to the registration statement shall also simultaneously be filed with that Exchange. Upon filing of the application for listing on that Exchange, two (2) copies of the application shall be filed with the Commission.

c. Upon the registration statement being declared effective by the Commission, the sale of the securities subject thereto shall be commenced within two (2) business days and be continued until they have been completely sold or until the sale has been terminated by action of the issuer. Upon completion or termination of the offering by the issuer, notification of such shall be promptly given to the Commission. Such notification shall include the number of securities sold. If attempts to sell the securities which are the subject of the registration statement have ceased, the issuer shall terminate the offering.

d. After termination of the offering, the sale or offering for sale of additional securities shall be effected through a separate registration statement relating to the additional securities irrespective of whether they had been previously registered but not sold.

2. Publication of Notice of Filing

a. The registrant shall prepare and file with its registration statement a notification of the filing which shall recite that a registration statement for the sale of the subject security has been filed with the Commission, that the registration statement is open to inspection by interested parties during business hours at the Commission and that copies thereof shall be furnished to everyone requesting such at a reasonable charge. The Code requires the issuer immediately to publish the notification, at its own expense, in two newspapers of general circulation in the Philippines, once a week for two consecutive weeks. The required format for this publication appears as “Annex A.”

b. The registrant shall submit to the Commission, as part of its filing of the registration statement, an affidavit with a copy of the publication that was, or is to be made, attesting that such action has been or will be immediately taken.

SRC Rule 8.1-1
Prospectus Delivery Rule

1. Prospectus Required. - Securities required to be, and which are, registered pursuant to Sections 8 and 12 of the Code shall not be sold unless a prospectus, which has been filed with the registration statement in the form and containing the information hereinafter described, is widely disseminated and sufficient copies have been made available so that all who desire may obtain one.

2. Prospectus Requirements. - In addition to the requirements of this Rule, a prospectus, including a preliminary prospectus, shall contain information as required by SRC Rule 12 and SEC Form 12-1 and shall be prepared in accordance with the requirements of SRC Rule 72.1.

3. Preliminary Prospectus. - A preliminary prospectus, which has been filed with the registration statement required by Sections 8 and 12 of the Code, may be circulated to potential investors prior to effectiveness of the registration statement if the following requirements have been met:

a. it meets all the requirements for a prospectus contained in paragraph 2 hereof;

b. it contains the following statement in bold face print, at least 12 point type prominently displayed:

A registration statement relating to these securities has been filed with the Securities and Exchange Commission, but has not yet been declared effective. No offer to buy the securities can be accepted and no part of the purchase price can be received until the registration statement has become effective, and any such offer may be withdrawn or revoked, without obligation or commitment of any kind, at any time prior to notice of its acceptance given after the effective date. An indication of interest in response hereto involves no obligation or commitment of any kind. This prospectus shall not constitute an offer to sell or the solicitation of an offer to buy.

a. it is the only selling document utilized in the pre-offering period, with the exception that the information contained in SRC Rule 8.3-1 may be disseminated in whole or in part to summarize the offering;

b. its use is such that wide dissemination is assured;

c. sufficient copies are made available so that all who desire may obtain one; and

d. it contains a statement whether the security is being offered in connection with a distribution by the issuer or by a security holder, or both, and whether the issue represents new financing or refunding, or both.

4. Wide Dissemination of Preliminary and Final Prospectus. - A preliminary or final prospectus shall be presumed to have been widely disseminated pursuant to paragraphs 1 and 3 of this Rule if copies have been distributed initially and additional copies have been furnished promptly, upon request, to at least the following:

a. each participant in the distribution (e.g., underwriters and brokers);

b. the main and extension offices of the Commission;

c. an Exchange if the securities will be listed thereon;

d. the issuer; and

e. to more than twenty (20) persons who are not qualified buyers under Section 10.1(l) of the Code.

5. Notice of Availability of Prospectus and Preliminary Prospectus. -

a. All participants in the distribution of an offering of securities to the public shall, when inquiries are made as to the offering, inform interested persons of the availability of preliminary prospectuses and final prospectuses and provide copies if requested.

b. A notice shall be placed on the front of the subscription agreement distributed in connection with the offering informing interested persons that they are entitled to receive a copy of a preliminary and/or final prospectus if they so desire and how and where one can be obtained.

c. Information required in subparagraphs a and b above concerning where preliminary and final prospectuses may be obtained shall include at least the following: addresses of extension and main offices of the Commission, any Exchange wherein the securities may be listed, and the issuer company, and the telephone number and the person to be contacted at each such location. A statement shall also be made that preliminary prospectuses and final prospectuses are available from all underwriters and brokers participating in the distribution.

6. Selling Documents During Offering Period. - The use of selling documents other than the final prospectus during the offering period is prohibited, with the exception that the information contained in SRC Rule 8.3-1 may be disseminated in whole or in part to summarize the offering.

7. Limitations on Use of Preliminary or Final Prospectus. - A preliminary or final prospectus shall not be used unless all information contained therein is up to date and accurately reflects the terms of the offering and the condition of the company. Thus, until such time as appropriate amendments are made thereto and have been filed with the Commission under SRC Rule 14, the use of a preliminary or final prospectus and the right to sell and offer for sale may be suspended under Section 15 of the Code when any of the following events occurs:

a. there is a material change in any information contained therein (including but not limited to, the occurrence of a material event which would be required to be reported on SEC Form 17-C);

b. the financial statements contained therein are over 225 days old.

8. Format of Prospectus. -

a. Appearance - The information required in the prospectus need not follow the order of the items or other requirements in Part I of SEC Form 12-1 with the exception of Items 1 and 2. However, the information shall not be presented in a manner that will obscure required information or information that is necessary to keep required information from being incomplete or misleading.

b. Captions of Headings - All information included in the prospectus should be properly captioned or headed in order to reasonably indicate covered subject matter. The information shall be divided into reasonably short paragraphs or sections (with the exception of financial statements and tabular data).

c. Condensed or Summarized Form - Except as to information required in tabular form and financial statements, the information included in the prospectus may be expressed in condensed or summarized form. Reference may be made to information in other parts of the prospectus instead of repeating the information in the form of notes to the financial statements.

d. Date of Prospectus - Each prospectus used after the effective date of the registration statement shall be dated as of the effective date of the prospectus. An amended or revised prospectus used thereafter shall bear the date of its issuance.

Language Clear and Understandable - All information that is required to be included in the prospectus shall be clearly understandable without the necessity of referring to SEC Form 12-1 or to the general rules and regulations. The chief goal of registration (disclosure for the benefit of investors) involves, among other things, the use of language that can be understood readily by the persons to whom it is addressed. Failure to use language that is clear and understandable to the investor may operate to defeat the purpose of the prospectus.

SRC Rule 8.3-1
Written Communication Not Deemed an Offer for Sale

1. Any notice, circular, advertisement, letter, or other communication shall not be deemed an offer for sale in violation of Section 8 of the Code if it is published or transmitted to any person after a registration statement has been filed and contains any or all of the following information:

a. the name of the issuer of the security;

b. the full title of the security and the amount being offered;

c. a brief indication of the general type of business of the issuer;

d. the price of the security, or if the price is not known, the method of its determination or the probable price range as specified by the issuer or the managing underwriter;

e. in the case of a debt security with a fixed (non contingent) interest provision, the yield or, if the yield is not known, the probable yield range, as specified by the issuer or the managing underwriter;

f. the name and address of the sender of the communication and the fact that he is participating, or expects to participate, in the distribution of the security;

g. the names of the underwriters;

h. the approximate date upon which it is anticipated the proposed sale to the public will commence;

i. whether the security is being offered through rights issued to existing security holders, and, if so, the class of securities the holders of which will be entitled to subscribe, the subscription ratio, the actual or proposed record date, the date upon which the rights were issued or are expected to be issued, the actual or anticipated date upon which they will expire, and the approximate subscription price, or any of the foregoing;

j. with respect to any class of debt securities, any class of convertible debt securities or any class of preferred stock, the security rating or ratings assigned to the class of securities by any credit rating agency recognized or accredited by the Commission and the name of such rating agency/ies which assigned such rating/s.

2. Every communication used pursuant to this Rule shall contain the following:

a. If a registration statement has not yet become effective, the following statement in bold face prominent type:

A registration statement relating to these securities has been filed with the Securities and Exchange Commission, but has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This communication shall not constitute an offer to sell or the solicitation of an offer to buy.

b. A statement whether the security is being offered in connection with a distribution by the issuer or by a security holder, or both, and whether the issue represents new financing or refunding or both;

c. The name and address of a person or persons from whom a written prospectus meeting the requirements of Section 12 of the Code may be obtained.

SRC Rule 9.2
Exempt Securities

Any security issued by a financial institution licensed by the Bangko Sentral ng Pilipinas to engage in quasi-banking, other than its own shares of stock, shall be exempt from registration under Section 8.1 of the Code; provided, however, that the purchase and sale of any such security shall not be exempt from antifraud, civil liability or other provisions of the Code.

SRC Rule 10-1
Exempt Transactions

1. Disclosure to Investors. - Any person claiming exemptive relief under Section 10.1 of the Code shall provide to any person to whom they offer for sale or sell securities in reliance on such exemption written disclosure containing the following information:

a. The provision of Section 10 of the Code under which exemption from registration is claimed;

b. Whether the Commission’s confirmation that such offer and sale qualifies as an exempt transaction has been obtained; and

c. The following statement in bold face, prominent type:

The securities being offered or sold have not been registered with the Securities and Exchange Commission under the Securities Regulation Code. any future offer or sale thereof is subject to registration requirements under the Code unless such offer or sale qualifies as an exempt transaction.

3. Exemptive relief under Section 10.1(c) (isolated transaction) shall not be available to an issuer of securities which shall not be considered as an “owner” thereof.

4. Exemptive relief under Section 10.1(k) (Private Placement) shall be subject to the following terms and conditions:

a. The issuer claiming such relief shall not engage in any form of general solicitation or advertising in connection therewith;

b. Securities sold in any such transaction may only be sold to persons purchasing for their own account;

c. Sales may be made to no more than nineteen (19) “non-qualified” buyers. A corporation, partnership or other entity shall be counted as one buyer; provided, however, if that entity is organized for the specific purpose of acquiring the securities offered and is not a qualified buyer under Section 10.1(l) of the Code, then each beneficial owner of equity securities in the entity shall count as a separate buyer under this Rule;

d. The issuer provides any person to whom they offer for sale or sell securities pursuant thereto with the following information:

i. the exact name of the issuer and its predecessor, if any;

ii. address of its principal executive offices;

iii. place of incorporation;

iv. exact title and class of the security;

v. par or stated value of the security;

vi. number of shares or total amount of securities outstanding as of the end of the issuer’s most recent fiscal year;

vii. name and address of the transfer agent;

viii. nature of the issuer’s business;

ix. nature of products or services offered;

x. nature and extent of the issuer’s facilities;

xi. name of the chief executive officers and members of the board of directors;

xii. issuer’s most recent balance sheet and profit and loss and retained earnings statement for each of the two preceding fiscal years or such shorter period as the issuer (including its predecessor) has been in existence;

xiii. whether the person offering or selling the securities is affiliated, directly or indirectly, with the issuer;

xiv. whether the offering is being made directly or indirectly on behalf of the issuer, or any director, officer or person who owns directly or indirectly more than ten percent (10%) of the outstanding shares of any equity security of the issuer and, if so, the name of such person; and

xv. information required under paragraph 1 of this Rule.

Provided, however, where the issuer is a reporting company under Section 17 of the Code, a copy of its most recent annual report (SEC Form 17-A) may be used to provide any of the required information.

e. The issuer files with the Commission a notice of exemption from registration requirements under Section 8 of the Code on SEC Form 10-1, including as an exhibit thereto, information furnished to investors in connection therewith pursuant to this paragraph, within ten (10) days after the initiation of any efforts to sell the securities which are subject thereto.

5. Confirmation of Availability of Exemption - Any person may apply to the Commission for confirmation that an exemption under Section 10 is available, in which case SEC Form 10-1 shall be filed not later than ten (10) days prior to the initiation of any efforts to sell the securities which are subject thereto, and include the prescribed filing fee; provided, however that a confirmation of an exemption under Sections 10.1(k) or (l) shall only be given where the securities sold pursuant to such exemption are purchased by persons purchasing for their own account and who shall not sell the same for a period of at least one (1) year (restriction period) from the date of such acquisition.

a. In connection with a transaction under Subsection 10.1(i), any fee paid pursuant to requirements under the Corporation Code may be applied in satisfaction of fees owed under this Rule.

b. The Commission shall not be precluded from acting on any application for confirmation filed after the initiation of any efforts to sell the securities.

6. Burden of Proof that Such Exemption is Available. -

a. Unless confirmation that such exemption is available is applied for under paragraph 5 of this Rule, any person claiming an exemption under Section 10 has the burden, if challenged, of establishing that the exemption is available. The Commission may challenge such exemption at any time.

b. A presumption that an exemption is not available may arise from the failure to file a notice as required by paragraph 4 (e) of this Rule. Failure to file such notice shall also subject a person claiming an exemption under Section 10 to administrative sanctions.

7. The sale or offer for sale of a security in any transaction exempt under Section 10 is not exempt from antifraud, civil liability or other provisions of the Code.

8. In view of the objective of full and fair disclosure under the Code, exemptive relief under Section 10 of the Code is not available to any issuer or other person for any transaction or chain of transactions that, although in technical compliance with the Code and this Rule, is part of a plan or scheme to evade the registration provisions of the Code. In such cases, registration under the Code is required.

SRC Rule 11.1
Definition of Commodity Futures Contracts

1. Commodity futures contract means a contract providing for the making or taking delivery at a prescribed time in the future of a specific quantity and quality of a commodity or the cash value thereof, which is customarily offset prior to the delivery date, and includes standardized contracts having the indicia of commodities futures, commodity options and commodity leverage, or margin contracts.

2. Commodity means any goods, articles, services, rights and interests, including any group or index of any of the foregoing, in which commodity interests contracts are presently or in the future dealt in.

3. Forward means a contract between a buyer and a seller whereby the buyer is obligated to take delivery and the seller is obliged to make delivery of a fixed amount of an underlying commodity at a pre-determined price and date. Payment in full is due at the time of delivery.

Without prejudice to applicable Bangko Sentral ng Pilipinas rules and circulars, the public trading of commodities futures contracts and pertinent Commission rules shall remain suspended until further orders of the Commission.

SRC Rule 12
Requirements for Filings Pursuant to the Securities Regulation Code
and the Corporation Code of the Philippines

1. This Rule sets forth the requirements applicable to the content of issuers' non-financial statement portions of:

a. Registration statements for the sale and/or distribution of securities pursuant to the provisions of Sections 8 and 12 of the Code and SRC Rule 8 thereunder. Registration Statements under Section 12 of the Code shall be filed on SEC Form 12-1;

b. Prospectuses to be used in connection with the public distribution of securities pursuant to Section 8 of the Code and SRC Rule 8-1.1 thereunder;

c. Periodic and other reports required to be filed with the Commission under Section 17 of the Code as provided in SRC Rules 17 and 17-1 and SEC Forms 17-Q, 17-A, 17-C, and 17-L, as appropriate, unless exempt from the provisions thereof; and

d. Proxy Statements required by Section 20 of the Code and SRC Rule 20 adopted pursuant thereto, and Information Statements pursuant to Section 17.1(b) and SRC Rule 17.1(b) adopted pursuant thereto. Filings under this paragraph shall be made on SEC Forms 20-A and 17-IS.

2. Reports filed on SEC Form 17-A and SEC Form 17-C shall be deemed to satisfy Section 141 and Section 26 of the Corporation Code of the Philippines, respectively; reports furnished to security holders pursuant to SR