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SEC. 10. Exempt
Transactions. - 10.1. The requirement of registration
under Subsection 8.1 shall not apply to the sale of any security in
any of the following transactions:
(a) At any judicial sale, or
sale by an executor, administrator, guardian or receiver or trustee
in insolvency or bankruptcy.
(b) By or for the account of a
pledge holder, or mortgagee or any other similar lien holder selling
or offering for sale or delivery in the ordinary course of business
and not for the purpose of avoiding the provisions of this Code, to
liquidate a bonafide debt, a security pledged in good faith as
security for such debt.
(c) An isolated
transaction in which any security is sold, offered for sale,
subscription or delivery by the owner thereof, or by his
representative for the owner’s account, such sale or offer for sale,
subscription or delivery not being made in the course of repeated
and successive transactions of a like character by such owner, or on
his account by such representative and such owner or representative
not being the underwriter of such security.
(d) The distribution by a
corporation, actively engaged in the business authorized by its
articles of incorporation, of securities to its stockholders or
other security holders as a stock dividend or other distribution out
of surplus.
(e) The sale of capital
stock of a corporation to its own stockholders exclusively, where no
commission or other remuneration is paid or given directly or
indirectly in connection with the sale of such capital stock.
(f) The issuance of bonds
or notes secured by mortgage upon real estate or tangible personal
property, where the entire mortgage together with all the bonds or
notes secured thereby are sold to a single purchaser at a single
sale.
(g) The issue and delivery of
any security in exchange for any other security of the same issuer
pursuant to a right of conversion entitling the holder of the
security surrendered in exchange to make such conversion: Provided,
That the security so surrendered has been registered under this
Code, or was, when sold exempt from the provisions of this Code, and
that the security issued and delivered in exchange, if sold at the
conversion price, would at the time of such conversion fall within
the class of securities entitled to registration under this Code.
Upon such conversion the par value of the security surrendered in
such exchange shall be deemed the price at which the securities
issued and delivered in such exchange are sold.
(h) Broker’s transactions,
executed upon customer’s orders, on any registered Exchange or other
trading market.
(i) Subscriptions for
shares of the capital stock of a corporation prior to the
incorporation thereof or in pursuance of an increase in its
authorized capital stock under the Corporation Code, when no expense
is incurred, or no commission, compensation or remuneration is paid
or given in connection with the sale or disposition of such
securities, and only when the purpose for soliciting, giving or
taking of such subscriptions is to comply with the requirements of
such law as to the percentage of the capital stock of a corporation
which should be subscribed before it can be registered and duly
incorporated, or its authorized capital increased.
(j) The exchange of
securities by the issuer with its existing security holders
exclusively, where no commission or other remuneration is paid or
given directly or indirectly for soliciting such exchange.
(k) The sale of securities by an
issuer to fewer than twenty (20) persons in the Philippines during
any twelve-month period.
(1) The sale of securities to
any number of the following qualified buyers:
(i) Bank;
(ii) Registered investment
house;
(iii) Insurance company;
(iv) Pension fund or retirement
plan maintained by the Government of the Philippines or any
political subdivision thereof or managed by a bank or other persons
authorized by the Bangko Sentral to engage in trust functions;
(v) Investment company; or
(vi) Such other person as the
Commission may by rule determine as qualified buyers, on the basis
of such factors as financial sophistication, net worth, knowledge,
and experience in financial and business matters, or amount of
assets under management.
10.2. The Commission may exempt
other transactions, if it finds that the requirements of
registration under this Code is not necessary in the public interest
or for the protection of the investors such as by reason of the
small amount involved or the limited character of the public
offering.
10.3. Any person applying for an
exemption under this Section, shall file with the Commission a
notice identifying the exemption relied upon on such form and at
such time as the Commission by rule may prescribe and with such
notice shall pay to the Commission a fee equivalent to one-tenth
(1/10) of one percent (1%) of the maximum aggregate price or issued
value of the securities.
SEC. 11. Commodity Futures Contracts. - No person shall
offer, sell or enter into commodity futures contracts except in
accordance with rules, regulations and orders the Commission may
prescribe in the, public interest. The Commission shall promulgate
rules and regulations involving commodity futures contracts to
protect investors to ensure the development of a fair and
transparent commodities market.
SEC. 12. Procedure for Registration of Securities. - 12.1.
All securities required to be registered under Subsection 8.1
shall be registered through the filling by the issuer in the main
office of the Commission, of a sworn registration statement with
respect to such. securities, in such form and containing such
information and documents as the Commission shall prescribe. The
registration statement shall include any prospectus required or
permitted to be delivered under Subsections 8.2, 8.3 and 8.4.
12.2. In promulgating rules
governing the content of any registration statement (including any
prospectus made a part thereof or annexed thereto), the Commission
may require the registration statement to contain such information
or documents as it may, by rule, prescribe. It may dispense with any
such requirement, or may require additional information or
documents, including written information from an expert, depending
on the necessity thereof or their applicability to the class of
securities sought to be registered.
12.3. The
information required for the registration of any kind, and all
securities, shall include, among others, the effect of the
securities issue on ownership, on the mix of ownership, especially
foreign and local ownership.
12.4. The registration
statement shall be signed by the issuer’s executive officer, its
principal operating officer, its principal financial officer, its
comptroller, its principal accounting officer, its corporate
secretary or persons performing similar functions accompanied by a
duly verified resolution of the board of directors of the issuer
corporation. The written consent of the expert named as having
certified any part of the registration statement or any document
used in connection therewith shall also be filed. Where the
registration statement includes shares to be sold by selling
shareholders, a written certification by such selling shareholders
as to the accuracy of any part of the registration statement
contributed to by such selling shareholders shall also be filled.
12.5. (a) Upon filing of
the registration statement, the issuer shall pay to the Commission a
fee of not more than one-tenth (1/10) of one per centum (1%) of the
maximum aggregate price at which such securities are proposed to be
offered. The Commission shall prescribe by rule diminishing fees in
inverse proportion the value of the aggregate price of the offering.
(b) Notice of the filing
of the registration statement shall be immediately published by the
issuer, at its own expense, in two (2) newspapers of general
circulation in the Philippines, once a week for two (2) consecutive
weeks, or in such other manner as the Commission by rule shall
prescribe, reciting that a registration statement for the sale of
such security has been filed, and that the aforesaid registration
statement, as well as the papers attached thereto are open to
inspection at the Commission during business hours, and copies
thereof, photo static or otherwise, shall be furnished to interested
parties at such reasonable charge as the Commission may prescribe.
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