Rules Governing the Dissemination of News, Tips or Rumors about the Issuer Corporation or Securities

April 10, 1997 SEC-BED * MEMORANDUM CIRCULAR NO. 02-97 TO : Stock Brokers and Dealers Philippine Stock Exchange SUBJECT : Rules Governing the Dissemination of News, Tips or Rumors about the Issuer Corporation or Securities The Commission has been informed that some unscrupulous market participants have been disseminating unverified information at the trading floor and have used such information in recommending clients transactions either to the advantage or prejudice of issuer corporations and the public investors. Consequently, the Commission deems it necessary to remind concerned parties of the following current rules of the Commission for their strict observance, to wit: RSA Rule 3-2. Ethical Standards Rule A broker or dealer, or associated person or salesman of a broker or dealer, in the conduct of his business, shall observe high standards of commercial honor and just and equitable principles of trade. RSA Rule 26 (a) (4)-1 Advertisements and Communications with the Public (a) All communications by brokers or dealers, or associated persons or salesmen of brokers or dealer, with the public shall be based on principles of fair dealing and good faith and should provide a sound basis for evaluating the facts in regard to any particular security or securities or type of security, industry discussed, or service offered. No material fact or qualification may be omitted if the omission, in the light of the context of the material presented would cause the advertising or sales literature to be misleading. Likewise we would like to make clear that any such unscrupulous party who circulates unverified information with the end in view of influencing the price of a particular issue or trades on a material information not known to the general public is guilty of price manipulation and/or insider trading Any such person found guilty of price manipulation, deceptive devices, insider trading shall be dealt with accordingly under Sections 46 and 56 of the Revised Securities Act. To maintain sound and equitable trading in securities, the Exchange is hereby directed to take the lead in putting an end to rumors being circulated at the trading floor. Corollarily, it is enjoined to investigate immediately and where necessary, it shall suspend trading of that particular issue and shall lift such suspension only after having ascertained the source and truthfulness of said information and taking appropriate action under the circumstances The Commission shall be furnished results of these investigations for evaluation. cdlex SO ORDERED. (SGD.) PERFECTO R. YASAY, JR. Chairman