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Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.
AT A GLANCE:
Securities refer to shares, participation or interests in a corporation or in a commercial enterprise or profit-making venture and evidenced by a certificate, contract, instruments, whether written or electronic in character. (Section 3.1, Securities Regulation Code)
The Securities Regulation Code seeks to establish a socially conscious, free market that regulates itself, 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. (Section 2, Securities Regulation Code)
Securities, as defined under Republic Act No. 8799 or the Securities Regulation Code, refer to shares, participation or interests in a corporation or in a commercial enterprise or profit-making venture and evidenced by a certificate, contract, instruments, whether written or electronic in character. (Section 3.1, Securities Regulation Code)
Republic Act No. 8799 or the Securities Regulation Code provides that securities include the following:
(a) Shares of stocks, bonds, debentures, notes evidences of indebtedness, asset-backed securities;
(b) Investment contracts, certificates of interest or participation in a profit-sharing agreement, certifies of deposit for a future subscription;
(c) Fractional undivided interests in oil, gas or other mineral rights;
(d) Derivatives like option and warrants;
(e) Certificates of assignments, certificates of participation, trust certificates, voting trust certificates or similar instruments
(f) Proprietary or nonproprietary membership certificates in corporations; and
(g) Other instruments as may in the future be determined by the Securities and Exchange Commission. (Section 3.1, Securities Regulation Code)
The 2015 Implementing Rules and Regulations of the Securities Regulation Code provides:
“Debt securities/instruments include any evidence of indebtedness such as bonds, notes, debentures, commercial papers, treasury bills, treasury bonds and other similar instruments as may be determined by the Securities and Exchange Commission.” (Section 3.1.20, Rule 3, 2015 Implementing Rules and Regulations of R.A. No. 8799)
In the case of Betty Gabionza v. Court of Appeals (G.R. No. 161057, September 12, 2008), the Supreme Court ruled that:
“The term ‘securities’ embodies a flexible rather than static principle, one that is capable of adaptation to meet the countless and variable schemes devised by those who seek to use the money of others on the promise of profits.” (Betty Gabionza v. Court of Appeals, G.R. No. 161057, September 12, 2008)
Read also: What is a tender offer under the Securities Regulations Code?
Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries regarding taxation and taxpayer’s remedies, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.
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