SEC adopts new implementing rules for securities law

The government adopted new rules that would provide companies greater flexibility in raising funds, address regulatory gaps and adopt global best practices in the local financial market.  

The Securities and Exchange Commission (SEC) approved the final draft of amendments to the Securities Regulation Code (SRC) four years after presenting the initial draft for public comments.

"We received significant inputs on this rulemaking, and in response, we incorporated many changes from the proposals that are designed to address varying concerns. I believe the final version faithfully implements the statutory requirements as mandated by SRC," SEC chairperson Teresita Herbosa said in a statement released last week.

The amendments include the introduction of a new category of security exempted from registration, relaxed requirements for qualified buyers and revised rules on underwriting and mandatory offers.

The revised rules exempt from registration securities issued or guaranteed by multilateral financial entities established through a treaty or binding agreement involving Philippines and public offerings that have a limited character.

The required annual gross income for individuals to qualify as security buyers was lowered to P10 million from P25 million. Any verifiable document may now be submitted to prove financial capacity.

Underwriters may now arrange a different distribution plan. But issuers of registered securities other than proprietary/non-proprietary membership certificates of shares must still enter into an underwriting agreement with an investment institution as a general rule.

Revised rules on tender offers provide for two levels of action depending on the threshold triggered: a disclosure and a mandatory tender offer. Guidelines in conducting valuation and issuing fairness opinion were also outlined. —Keith Richard Mariano/KBK, GMA News