IT Law Journal

administrator January 3rd, 2005

www.sec.gov.ph: Making the public more secure
by Ma. Cristina A. Ramos

This section is a continuing series of articles featuring various websites which may be relevant to legal practitioners, legal researchers, and law students.

Adapting to the needs of the changing times, the Securities and Exchange Commission (SEC) maximizes the benefits of Internet technology by making information available online and by offering online transactions. The SEC is now one of the most advanced agencies of the government in terms of compliance with the mandate of Republic Act no. 8792 or the Electronic Commerce Act.

The SEC’s website, following a functionalist design, provides on its main menu well- classified submenus for easier access. The menu consists of ‘Main,’ ‘Online Transactions,’ ‘What`s New,’ ‘Investor Info,’ ‘About SEC,’ ‘Archives,’ ‘Publications’ and ‘Downloads.’ ‘Main’ provides the access to the html files of the Securities Regulation Code (Republic Act No. 8799), its implementing rules and regulations, as well as memorandum circulars and notices issued by the SEC.

Basic information about the commission is found in ‘About SEC.’ This section provides information on the accomplishment, history, management, mission and vision, organizational setup, powers and functions, location and directors of the SEC. It also has a link to a separate site of one of the offices of the SEC, the compliance and enforcement department.

‘Archives’ meanwhile contains market reports, other circulars, speeches, IT-related materials, seminars, announcements, examination results, and concluded public consultations while ‘Publication’ provides access to the SEC primer on IAS, SEC in the News, Citizen’s Manual and Philippines 5000.

Online Transactions

By using information technology, the SEC offered a solution to the bureaucratic red tape usually associated with transactions with government. People who want to transact with the SEC can now avoid the slow moving traffic along EDSA. Moreover, they do not have to fall in line and spend the whole day falling in line or waiting for their names to be called inside the SEC’s office, and then wait another week to get results. Now, people can do business with the SEC through the computer any time of the day.

Transactions that usually take a day or two, or even a week, can now be finished in just several clicks of the mouse. For example, prospective registrants of corporations or partnerships who want to find out whether their desired corporate or partnership name are still available can do it in just two mouse clicks. They simply have to visit the website of the SEC, click ‘Search Reserved/Registered Companies’ under ‘Online Transactions,’ enter the desired corporate or partnership name in the space provided, and press enter.

Another online service that the SEC website offers is the ‘Search for Registered Names.’ This facility allows a person to know whether or not a given corporation or partnership is registered with the SEC in accordance with the Corporation Code of the Philippines. However, the fact that a certain corporate or partnership name is indeed registered with the SEC is not an assurance that the identified corporation is authorized to sell to the public securities or other investment instruments.

SEC-iRegister

Probably the most valuable service that the SEC offers is the SEC-iRegister. It is a web-based company registration system of the SEC. The commission describes this service as ‘quick, affordable, and user-friendly.’ It is available to the public 24 hours a day, seven days a week.

SEC-iRegister allows SEC’s clients to do the following online:

• Verify the availability of the desired name for corporation or partnership;
• Reserve the verified name;
• Accomplish and print the registration from online without the need to buy the SEC forms;
• On-line registration of business organizations, whether a stock or non-stock corporation or a general, limited, or professional partnership;
• Deposit the paid-up capital online;
• Pay the appropriate registration fees online, and;
• Receive notice of approval within the same day.

This facility has been made available to the public even before June 30, 2002, the deadline set by RA 8792, otherwise known as the E-Commerce Act. At present, the SEC uses version 2 of the SEC i-Register system, an enhanced version of the original I-Register system. The new version has the following features:

• Enhanced Name Verification. This feature provides for a list of reserved and registered companies that is similar to a proposed company or partnership name.
• Cancel Reservation Facility. This allows the user to change his reserved company name. The client only has to cancel the reserved company name and reserve a new one again.
• Endorsement Listing. For the guidance of the public, a list of selected industries that require endorsement from government agencies is provided.
• Search Industry. This feature makes the selection of industry easier and faster.

For easier computation of fees, the site also provides an online calculator.

Public Beware

For public safety and convenience, the SEC provided in its website, under the menu ‘Investor Info,’ the following: SEC Advisory, SEC Orders, Settlement Offers, Companies with Cease and Desist Order, and Corporations with Revoked Certificate of Registration. The link to corporations with revoked certificates of registration is available from 8 am to 9 pm Monday through Friday except holidays. All the lists are in PDF files. The lists of companies that have CDOs issued against them or CDOs that became permanent after the effectivity of the SRC are likewise available from 8 am to 9 pm Monday through Friday except during holidays. The files are downloadable in PDF format.

More on Investor’s Info

The website also provides listings of registered entities, market participants, and issuers of registered commercial papers/bonds, equity securities, and securities to the public.

The list of market participants, as posted in the SEC’s website, are classified as follows:

• Broker/Dealer (PSE Trading Participants)
• Investment Company Adviser
• Transfer Agent
• Other Market Participants
• Investment Houses - Associated Person
• Investment Houses
• Underwriter of Securities
• Dealers in Government Securities.

However, in the matter of registered entities, the SEC made it clear that the inclusion of any company in the list does not mean that any or all of those listed is being endorsed by the SEC to solicit, take, receive, or hold investments from the public. According to the SEC, the decision of anyone to place one’s investment on any company in whatever form is an individual decision based on one’s own judgment Thus, SEC suggests that anyone interested to invest in any of the companies listed herein or in any other company should study all publicly available materials that have been issued by the company following the full disclosure principle.

Downloadable Annexes and Forms

The site also offers downloadable annexes and forms. The following are some of the annexes in zip files that are available for download.

• Registration of Securities
• Definition of Terms Used In Full Disclosure Forms
• Non-Financial Disclosure Requirements
• Information Relating to Possession or Control Requirements Under SRC Rule 49.2-1
• Formula for Determination of Reserve Requirements 1of Broker Dealers Under SRC Rule 49.2-1
• Explanation of Books and Records Rule
• Customer Account Information Form

Forms that are available for sale in the SEC are now downloadable for free. This can be found under the menu ‘Downloads.’ Some of the forms available for download are the following:

• Notice of Exempt Transaction
• Application for Confirmation
• Registration Statement Under the Securities Regulation Code
• Annual Report
• Current Report
• Notification of Suspension of Duty to File Reports
• Tender Offer Report
• Proxy Statement
• Initial Statement of Beneficial Ownership of Securities
• Statement Of Changes In Beneficial Ownership Of Securities
• Application For Registration as a Salesman or Associated Person of a Broker Dealer and Amendments Thereto
• Application for Broker Dealer Registration Renewal
• Application for Registration Renewal of Investment Houses, Underwriters of Securities and Government Securities Eligible Dealers

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