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Volume 1,
Series 1
SEC Consolidates Scale of Fines as of November 2013

Last November 2013, the Securities and Exchange Commission (SEC) published the Consolidated Scale of Fines. Due to the hefty number of the violations, the Commission is prepared to impose higher penalties so it would decrease. The reason for this increase since the year 2007 and 2012 - is the revenue collection.

This will adapt the following frameworks: amending the implemented rules and regulations, rationalization of the amounts of fines, adoption in the revised scale of the definition used in relevant laws and rules, commissioned with unregistered persons under the Philippine Corporation Code of any violation of the rules, and classifying the violations based on requirements.

It seeks to provide: the clarity of the obligations, conditions of the violations, fines and penalties, of the covered corporations.

Indicated below are the corporation type and its corresponding basis of penalty computation:

CORPORATION TYPEBASIS OF PENALTY COMPUTATION
Ordinary Computation with no secondary license Amount of total assets subject to limits prescribed under the corporation code and securities regulations code
Foundation Amount of total assets subject to limits prescribed by the corporation code and the securities and regulation code and the imposition of specific penalty for non-submission of the prescribed sworn statement and certification
Branches and regional offices of foreign corporation licensed to operate in the Philippines Amount of total assets subject to limits prescribed by the corporation code and the securities and regulations
Lending companies Amount representing the breach/excess, subject to limits prescribed under the lending company act and securities regulations
Financing companies Amount representing the breach/excess, subject to limits prescribed under the financing company act and securities regulations code
Brokers and dealers of securities and government securities eligible dealers(GSEDS) Amount of paid-in capital stock subject to limits prescribed under the securities regulations code
Investment houses, universal banks registered as underwriters of securities and investment company advisers Amount of paid-in capital stock subject to limits prescribed by investment houses law and securities regulation code
Clearing agency and clearing agency as depository and stock and securities exchanges Amount paid-in capital stock subject to limits prescribed under the securities regulations code
Issues of registered securities to the public Amount of securities issued to the public subject to the limits prescribed under the securities regulations code

These are the conditions of the fines within statutory limits:

  1. A fine of no less than P1,000 but not more than P10,000 per section 144 of the Corporation Code of the Philippines.
  2. A fine of no less than P10,000 nor more than P1,000,000 plus not more than P2,000 for each day of continuing violation per Section 54 of the Securities and Regulations Code.
  3. A fine of not less than P10,000 and not more than P50,000 per Section 12 of the Lending Company Act.
  4. A fine of not less than P10,000 and not more than P100,000 per Section 14 of the Financing Company Act.
  5. A fine not exceeding P200 per day of everyday during which such violation or non-compliance continues and/or suspend its certificate of registration per Section 16 of the Investment Houses Law.

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