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Questions and Answers
Who is the head of the Securities and Exchange Commission?
Who is the head of the Securities and Exchange Commission?
Chairperson
What is the minimum age for a Chairperson of the Securities and Exchange Commission?
What is the minimum age for a Chairperson of the Securities and Exchange Commission?
The Securities and Exchange Commission consists of a Chairperson and 5 Commissioners.
The Securities and Exchange Commission consists of a Chairperson and 5 Commissioners.
False
What is the core function of the Market Regulation Department?
What is the core function of the Market Regulation Department?
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What department registers domestic corporations in the Philippines?
What department registers domestic corporations in the Philippines?
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How often must the Securities and Exchange Commission meet for business?
How often must the Securities and Exchange Commission meet for business?
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The Compliance and Enforcement Department takes appropriate action against market participants for legal infractions.
The Compliance and Enforcement Department takes appropriate action against market participants for legal infractions.
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What powers does the Securities and Exchange Commission have under Section 5 of R.A. 8799?
What powers does the Securities and Exchange Commission have under Section 5 of R.A. 8799?
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What is the official name of the Code?
What is the official name of the Code?
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A corporation is considered an artificial being created by operation of law.
A corporation is considered an artificial being created by operation of law.
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Which options classify a corporation under this Code?
Which options classify a corporation under this Code?
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What is a stock corporation?
What is a stock corporation?
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Who are considered corporators in a corporation?
Who are considered corporators in a corporation?
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Corporations created by special laws or charters are primarily governed by the provisions of the __________ law or charter.
Corporations created by special laws or charters are primarily governed by the provisions of the __________ law or charter.
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What must shares in a stock corporation have?
What must shares in a stock corporation have?
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Banks are allowed to issue no-par value shares of stock.
Banks are allowed to issue no-par value shares of stock.
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Which matters are non-voting share holders entitled to vote on?
Which matters are non-voting share holders entitled to vote on?
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Study Notes
Securities and Exchange Commission (SEC)
- Composed of a Chairperson and four Commissioners, appointed by the President of the Philippines for a seven-year term.
- Core responsibility includes capital market regulation, implemented across five principal departments.
Key Departments and Functions
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Market Regulation Department
- Develops compliance criteria for market participants.
- Supervises registration requirements and reports violations to the Compliance and Enforcement Department.
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Corporate Finance Department
- Registers securities before public sale.
- Ensures adequacy of information provided about the securities.
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Non-Traditional Securities and Instruments Department
- Registers and licenses non-traditional financial instruments such as pre-need plans and commodity future contracts.
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Company Registration and Monitoring Department
- Registers domestic corporations, partnerships, and foreign entities intending to operate in the Philippines.
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Compliance and Enforcement Department
- Oversees compliance by market participants and issuers.
- Implements enforcement actions for violations of the Code and relevant laws.
Chairperson and Commissioner Qualifications
- Chairperson must be at least 40 years old and a natural-born resident citizen.
- Responsible as the Chief Executive Officer (CEO) of the Commission, with executive authority over policies, decisions, and operations.
- Commissioners must be a natural-born citizen, at least 35 years old, with expertise in social and economic disciplines.
- A majority, including the Chairperson, must be members of the Philippine Bar.
Meeting Protocols
- Commissioners meet at least once a week or as required; notice is given to all members.
- A quorum consists of three commissioners, and functions can be delegated for operational efficiency, excluding independent review or legislative powers.
Powers and Functions of the SEC
- Govern all corporations, partnerships, and associations with government-issued licenses or permits.
- Formulate policies and provide recommendations regarding the securities market.
- Advise legislative bodies and government agencies on securities market issues and propose relevant legislation.
- Authority to approve, reject, suspend, or amend registration statements and licensing applications.
Corporation Code of the Philippines
- Known as "The Corporation Code of the Philippines".
Definition and Nature of Corporations
- A corporation is an artificial entity created by law with rights of succession and legally authorized powers.
Types of Corporations
- Corporations under the Code can be classified as:
- Stock Corporations: Have capital stock divided into shares; can distribute dividends based on shares held.
- Non-Stock Corporations: Do not have capital stock and are not authorized to distribute dividends.
Special Laws and Charters
- Corporations established by special laws or charters are primarily governed by those specific laws, supplemented by the general provisions of the Corporation Code.
Corporators and Incorporators
- Corporators: Individuals who make up the corporation (stockholders or members).
- Incorporators: Original stockholders or members who sign the articles of incorporation.
Share Classification
- Stock corporations may classify shares into various classes or series with specified rights and privileges, as stated in their articles of incorporation.
- Voting rights may be restricted for certain classes (e.g., preferred/redeemable shares).
- Every corporation must maintain at least one class of shares with full voting rights.
Share Properties
- Shares can be issued with or without par value; no-par shares are not permitted for certain entities (banks, public utilities).
- Preferred shares may have preferences in liquidation and dividend distribution but must have a stated par value.
- The board of directors can determine specific terms for preferred shares, effective upon filing with the Securities and Exchange Commission.
Voting Rights of Shares
- Non-voting share holders can vote on significant actions:
- Amendment of articles of incorporation.
- Adoption and amendment of by-laws.
- Sale or lease of significant corporate assets.
- Incurring or increasing bonded indebtedness.
- Changes in capital stock.
- Mergers or consolidations.
- Investment of funds into other corporations.
- Dissolution of the corporation.
- Voting requirements for corporate actions generally pertain only to shares with voting rights.
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Description
Explore the structure and functions of the Securities and Exchange Commission (SEC) in the Philippines. This quiz covers the key departments and their responsibilities, including market regulation and corporate finance. Test your knowledge on the role of SEC in the capital market.
