Rules Fixing the Amount of Paid-Up Capital of Stock Brokerage Firms and Their Surety Bonds

October 9, 1973 RULES FIXING THE AMOUNT OF PAID-UP CAPITAL OF STOCK BROKERAGE FIRMS AND THEIR SURETY BONDS In the public interest and for the protection of investors, the Securities and Exchange Commission, pursuant to the powers vested in it under Section 33 of Commonwealth Act No. 83, otherwise known as the Securities Act and Section 1(f) of Republic Act No. 1143, hereby promulgates the following rules: 1. Every person applying for a license to engage as a stock broker and dealer must have a paid-up capital of at least ONE MILLION (P1,000,000.00) PESOS. Brokers and dealers who are currently registered or licensed as such but whose paid-up capital are less than P1,000,000.00 may be allowed to continue to operate until the expiration of their licenses on December 31, 1974, but renewal thereof for the year 1975 and thereafter shall not be allowed until their paid-up capital shall have been increased. LexLib 2. The amount of surety bonds required to be filed pursuant to Section 14 of Commonwealth Act No. 83 by stock brokers and dealers is fixed at not less than TWO HUNDRED THOUSAND (P200,000.00) PESOS for brokers and not less than ONE HUNDRED THOUSAND (P100,000.00) PESOS for dealers. Such bond or bonds shall be in favor of the Government of the Republic of the Philippines, and conditioned upon the faithful compliance with the provisions of the Securities Act and its implementing rules and regulations by said brokers and dealers and by all their salesmen while acting for them. 3. When a corporation is admitted and authorized to operate a seat in an exchange, stockholders owning at least 95% of the outstanding capital stock of the corporation shall execute a public instrument making themselves jointly and severally liable without limitations, for all the transactions and dealings of said corporation and at least three (3) copies of such document shall be filed with the Commission: PROVIDED, however, that if the 95% outstanding capital stock is owned by only one person, another stockholder shall be required to execute with him the said public instrument of guaranty; PROVIDED FURTHER, that where the signatories thereto are husband and wife, another stockholder shall be required to execute with them the said public instrument. 4. No corporation shall be allowed to operate a seat in any exchange unless all the stockholders thereof, which in no case shall be more than ten (10), are acceptable to the Board of Governors of such exchange and which fact must be so certified by the said Board to the Securities and Exchange Commission. 5. Member-firms in any stock exchange shall engage solely and exclusively in the stock and bond brokerage business and in activities directly or indirectly connected therewith or incidental thereto. 6. These rules shall take effect fifteen (15) days after they have been publicly promulgated by publication in at least two newspapers of general circulation throughout the Philippines, and in the Official Gazette. 7. Any violation of these rules shall be punished by a fine of not exceeding two hundred pesos, and if the violation continues, an additional fine of not exceeding two hundred pesos per day for every day of delay. If the violation is committed by a broker and/or dealer, the Commission, in serious cases, may suspend or revoke his license, in addition to the foregoing fine. (SGD.) ARCADIO E. YABYABIN Securities and Exchange Commissioner APPROVED: TROADIO T. QUIAZON, JR. Acting Secretary of Trade