SEC EYES EXPANDED LIST OF QUALIFIED SECURITY BUYERS

The Securities and Exchange Commission (SEC) is seeking to expand the list of entities deemed as qualified buyers in proposed amendments to the 2015 implementing rules and regulations (IRR) of Republic Act No. 8799, or the Securities Regulation Code (SRC).

Section 8 of the SRC provides that securities shall not be sold or offered for sale or distribution in the Philippines without a registration statement duly filed with and approved by the commission, it said in a statement on Friday.

Rule 10.1 of the SRC IRR enumerates the list of qualified buyers. SRC Sections 8 and 12 shall not apply to securities issued and sold to the expanded list of qualified buyers.

Under the proposed amendment, the commission shall consider as qualified buyers registered securities dealers, accounts managed by a registered broker under a discretionary arrangement, and registered investment companies, such as mutual fund companies.

This is in addition to the current list of qualified buyers, which includes banks, registered investment houses, insurance companies, and pension funds or retirement plans maintained by the government.

The list of qualified buyers shall also include provident funds or pension funds maintained by a government agency or by a government or private corporation and managed by an entity authorized accordingly by the Bangko Sentral ng Pilipinas (BSP) or SEC, as well as a trust corporation that is authorized by the BSP to perform the acts of a trustee, among others.

Additionally, the following entities will be deemed qualified buyers: pre-need company authorized by the Insurance Commission; authorized collective investment schemes; a listed entity that engages the service of a professional fund manager; and a foreign entity that, if established or incorporated in the Philippines, would be covered by the enumeration.

The commission may also determine as qualified buyers, by rule or order, such other persons 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.

The proposed amendments also aim to reflect in SRC IRR Rule 9 provisions pertaining to the list of securities exempted from registration, as stated in SRC Section 9. Furthermore, the proposed amendments will allow the commission to add to the list of exempt securities through the issuance of an order, in addition to the implementation of a rule or regulation after a public hearing.

The SEC released the proposed amendments to SRC Rules 9 and 10 on the commission’s website on April 14 for public comment.

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