Consolidated Scale of Fines

September 22, 2005 SEC MEMORANDUM CIRCULAR NO. 06-05 CONSOLIDATED SCALE OF FINES The Commission resolved to approve the following revised administrative penalties for each specified violation of the Securities Regulation Code (SRC) and its Amended Implementing Rules and Regulations (IRR), Investment Company Act (ICA) Rule 35-1. SRC/IRR Provisions Description First Offense Second Offense Third Offense Sections 8 and 12; Selling or Offering for Sale or 1% of the amount of transaction or 2% of the amount of each 6% of the amount of each SRC Rules 8 & 12 Distribution of Securities to the Public without prior registration or permit to sell P10,000 per transaction, whichever is higher. transaction or P20,000 per transaction, whichever is higher. transaction or P60,000 per transaction, whichever is higher. Section 10; SRC Late filing of notice of exemption pursuant to SRC Rule 10.1 (k&l) P2,000 plus P100 per day of delay; P4,000 plus P200 per day of delay; P12,000 plus P600 per day of delay; For listed companies: P10,000 plus P100 per day of delay P20,000 plus P200 per day of delay P60,000 plus P600 per day of delay Non-Compliance with the Disclosure Requirements under SRC Rule 10.1 P10,000 plus P100 per day of delay P20,000 plus P200 per day of delay P60,000 plus P600 per day of delay Section 14; SRC Rule 14 Failure to Amend Registration Statement in accordance with SRC Rule 14. Change in the qualitative terms and conditions of the Securities including work program or use of proceeds. P10,000 plus P100 per day of delay P20,000 plus P200 per day of delay P60,000 plus P600 per day of delay Increase in the number of shares or offering price per share (in excess of the price range, if any) 1% of the amount of each sale in excess of the authorized shares or price, or P10,000 per transaction, whichever is higher, plus P100 per day of delay of the filing of the amendment. 2% of the amount of each sale in excess of the authorized, shares or price, or P20,000 per transaction, whichever is higher, plus P200 per day of delay of the filing of the amendment 6% of the amount of each sale in excess of the authorized shares or price, or P60,000 per transaction, whichever higher, plus P600 per day of delay of the filing of the amendment. Failure to timely publish the notice of amendments. P10,000 plus P100 per day of delay P20,000 plus P200 per day of delay. P60,000 plus P600 per day of delay. Failure to Refund Investment (In case of derogation of rights of purchasers due to the amendments 5% of the amount of the unrefunded investment plus P100 per day of delay of the refund 15% of the amount of the unrefunded amount plus P200 per day of delay of the refund 30% of the amount of the unrefunded amount plus P600 per day of delay of the refund Section 17.1; SRC Rule 17.1 Late filing of current report (SEC Form 17-C); Reprimand/Warning P30,000 plus P200 per day of delay P40,000 plus P400 per day of delay Incomplete Current Report (SEC Form 17-C) This shall be in addition to the penalty for late filing of the report per due date under the rules. Reprimand/Warning P10,000 plus P200 per day of delay of filing the amended report P20,000 plus P400 per day of delay of filing the amendment report. Late filing of quarterly report (SEC Form 17-Q); Reprimand/Warning P50,000 plus P300 per day of delay; P60,000 plus P600 per day of delay; Incomplete Quarterly Report (SEC Form 17-Q) This shall be in addition to the penalty for late filing of the report per due date under the Rules. Reprimand/Warning P20,000 plus P300 per day of delay of filing the amended report P40,000 plus P600 per day of delay of filing the amended report Late filing of Annual report (SEC Reprimand/Warning P100,000 plus P500 per day of P200,000 plus P1,000 per day Form 17-A) delay of delay Incomplete Annual Report Reprimand/Warning P30,000 plus P500 per of delay; P60,000 plus P1,000 (SEC FORM 17-A) day of delay of filing the per day of delay of filing This shall be in addition to amended report the amended report. the Penalty for late filing of the report per due date under the Rules. Late filing of the notice of P10,000 plus P100 per day P20,000 plus P200 per day P50,000 plus P600 per day suspension to file reports of delay. of delay of delay (SEC Form 17-EX) Late filing of monthly report Reprimand/Warning P10,000 plus P100 per day P20,000 plus P200 per day on exempt commercial papers of delay of delay Late filing of quarterly report Reprimand/Warning P20,000 plus P100 per P40,000 plus P200 per day on exempt commercial papers day of delay of delay Late filing of annual information Reprimand/warning P20,000 plus P200 per day P40,000 plus P400 per day statement on commercial papers of delay of delay and/or payment of annual exemption fee Section 18; SRC Rule 18 Late filing of Reports by 5% or Reprimand/Warning 1% of the amount of each 2% of the amount of each more holders of equity securities purchase or disposition, or transaction, or P20,000 per (SEC Form 18-A/18-AS) P10,000 per transaction, transaction, whichever is higher whichever is higher plus P200 per day of delay. plus P100 per day of delay; Incomplete reports by 5% or more holders of Reprimand/Warning P10,000 plus P300 per P20,000 plus P600 per day of equity securities (SEC Form 18-A day of delay of the submission delay of the submission of the 18-AS) of the amended report. amended report. This shall be in addition to the penalty for late filing of the report per due date under the Rules. Section 19.1; SRC Rule 19.1 Late filing of tender offer report (SEC Form 19-1); P50,000 plus P500 per day of delay of filing the report P100,000 plus P1,000 per day of delay of filing the report P200,000 plus P2,000 per day of delay of filing the report Incomplete Tender Offer P30,000 plus P500 per day of P60,000 plus P1,000 per day P120,000 plus P2,000 per day of Report (SEC Form 19-1) delay of filing the amended of delay of filing the amended delay of filing the amended report report report Failure to conduct a tender P100,000 or .01% of the P200,000 or .02% of the P300,000 or .06% of the aggregate offer (Pursuant to aggregate amount of the tender aggregate amount of the tender mount of the tender offer, which- SRC Rule 19.1); offer, whichever is higher plus offer, whichever is higher plus ever is higher plus P2,000 per day P500 per day of delay P1,000 per day of delay of delay Failure to comply with any other P50,000 plus P500 per day of P100,000 plus P1,000 per day P200,000 plus P2,000 per requirements of SRC Rule 19.1 continuing violation of continuing violation day of continuing violation Section 20 [in relation with Late filing of information statement Reprimand/Warning P100,000 plus P500 per day of P200,000 plus P1,000 per day of 17.1(b)]; SRC Rule 20 (SEC Form 20-IS); delay delay Incomplete Reprimand/Warning P30,000 plus P500 per P60,000 plus P1,000 per day information statement (SEC Form day of delay of filing the of delay of filing the amended report 20-IS); amended report Failure to comply with any Reprimand/Warning P50,000 plus P500 per P100,000 plus P1,000 per day of of the other procedural requirements day of continuing violation continuing violation of SRC Rule 20 Section 23; SRC Rule 23 Late filing of statement of beneficial Reprimand/Warning 1% of the amount of each 2% of the amount of each transaction ownership (SEC Form 23-A/B); purchase or disposition, or or P20,000 per transaction, whichever P10,000 per transaction, is higher plus P200 per day of delay whichever is higher plus P100 per day of delay. Incomplete statement of beneficial ownership (SEC Form 23-A/B) Reprimand/Warning P10,000 plus P100 per day of delay of the sub- mission of the amended report. P20,000 plus P200 per day of delay of the submission of the amended report. For directors/officers Qualifying or not more than Reprimand/Warning P10,000 plus P100 per day of P20,000 plus P200 per day of delay shares (100) shares delay of the submission of the of the submission of the report. report. More than 100 shares but less 5% of Reprimand/Warning P20,000 plus P100 per day of P40,000 plus P200 per day of delay the outstanding equity security delay More than 5% but less than 10% Reprimand/Warning P10,000 plus P100 per day of P20,000 plus P200 per day of delay delay Section 38; SRC Rule 38 Failure to elect independent Reprimand/Warning P100,000 plus P500 per day of P150,000 plus P1,000 per day of director(s) or election of an continuing violation. continuing violation. unqualified independent director or Election of an Unqualified Independent Director Section 54 Misrepresentation or misleading statements in any filings required to be submitted to the commission. (This is in addition to the penalty on the principal report, if any.) P100,000 plus P500 per day of continuing violation P200,000 plus P1,000 per day of continuing violation P400,000 plus P2,000 per day of continuing violation Failure to submit any of the Reprimand/Warning P25,000 plus P500 per day of P100,000 plus P1,000 per day of certifications on corporate continuing violation continuing violation governance which were represented to be submitted Any misrepresentation in the Reprimand/Warning P50,000 plus P500 per day of P100,000 plus P1,000 per day of submitted Manual on Corporate continuing violation continuing violation Governance Section 68 Failure to comply with any of the P25,000 plus P500 per day of P50,000 plus P500 per day P100,000 plus P1,000 per day of requirements of SRC Rule 68 or violation of violation violation Incomplete Disclosure in the Financial Statements Material misstatements in P50,000 or 1/10 of 1% of violation; P100,000 or 1/10 violation; P200,000 or 1/10 of 6% the financial report. of the amount of misstatement, of 2% of the amount of of the amount of misstatement, whichever is higher, plus P500 misstatement, whichever is whichever is higher, plus P2,000 per day of continuing violation higher plus, P1,000 per day of per day of continuing violation continuing violation SRC and IRR provisions on Exchange, Brokers and Dealers, Other Selling Persons SRC/IRR Provisions Description First Offense Second Offense Third Offense SRC Rule 24.1 (b)-1 Manipulative practices BD-P100,000 AP/S-P50,000 P150,000; P75,000 P200,000; P100,000 SRC Rule 24.1 (d)-1 Advertisements and communications Reprimand/Warning BD-P100,000 AP/S-P50,000 P150,000; P75,000 with the public SRC Rule 24.1 (d)-2 Publication of transactions and Reprimand/Warning BD-P100,000 AP/S-P50,000 P150,000; P75,000 quotations SRC Rule 24.1 (d)-3 Payment to influence market prices BD-P100,000 AP/S-P50,000 P150,000; P75,000 P200,000; P100,000 SRC Rule 24.2.3 Prohibition on guarantees against Reprimand/Warning BD-P100,000 AP/S-P50,000 P150,000; P75,000 loss Section 25 Violation of regulation of option P50,000 P75,000 P100,000 trading Section 26 Fraudulent transactions BD-P100,000 AP/S-P50,000 P150,000; 75,000 P200,000; P100,000 SRC Rule 26.3-1 Use of information obtained Reprimand/Warning P50,000 P75,000 in fiduciary capacity SRC Rule 26.3-2(b) Prohibited representations P50,000 P75,000 P100,000 Section 27 Insider's trading BD-P100,000 AP/S-P50,000 P150,000; P75,000 P200,000; P100,000 Section 28.1 Failure to register as, brokers, dealers of: Equity securities; Reprimand/Warning P100,000.00 n/a Proprietary shares P50,000.00 n/a SRC Rule 28.1-1 (E)(vi) Failure to register branch office P100,000-P100/day of delay P25,000-P100/day of delay P50,000-P100/day of delay SRC Rule 28.1-1 (E)(viii) Failure to maintain registered AP Reprimand/Warning P10,000.00-P100/day of delay P25,000-P100/day of delay SRC Rule of 28.1-1 (E)(xi) Failure to maintain separate bank Reprimand/Warning P20,000.00 P25,000.00 account for client fund SRC Rule 28.1-1 (E)(xiii) Failure to report amendment Reprimand/Warning P10,000.00-P100/day of delay P15,000.00 -- do SRC Rule 28.1-4 Failure to register as: Salesman Company Reprimand/ 10,000.00 15,000.00 Individual; Warning 50,000.00 7,000.00 Associated Person Company Reprimand/ 10,000.00 20,000.00 Individual Warning 5,000.00 7,000.00 SRC Rule 28.1-4(c) Failure to notify discontinuation Reprimand/Warning P10,000.00-P100/day P15,000.00-P100/day of employment of salesman, of delay of delay associated person (SEC Form 28-T) SRC Rule 30.1 Violation of Rules on Affiliated Reprimand/Warning 10,000.00 25,000.00 Transactions SRC Rule 30.2-1 Ethical Standards Rule Reprimand/Warning 50,000.00 100,000.00 SRC Rule 30.2-2 Confirmation of customer orders -do- 10,000.00 15,000.00 SRC Rule 30.2-3 Client agreement -do- 10,000.00 15,000.00 Client agreement with discretionary -do- 50,000.00 100,000.00 account SRC Rule 30.2-4 Suitability rule -do- 50,000.00 100,000.00 Churning/Excessive trading 10,000.00 15,000.00 20,000.00 SRC Rule 30.2-5 Rules on commissions & charges Reprimand/Warning 10,000.00 15,000.00 for services of broker dealer SRC Rule 30.2-6 Failure to establish/maintain Reprimand/Warning 25,000.00 50,000.00 effective & appropriate compliance function Failure to inform the 25,000.00 50,000.00 100,000.00 commission of occurrences of material non-compliance with legal requirements Failure to report to management Reprimand/Warning 5,000.00 7,000.00 and to maintain a logbook Failure to file compliance report Reprimand/Warning 5,000.00-P100/day 7,000.00-P100/day of delay of delay SRC Rule 30.2-7 Failure to establish, implement Reprimand/Warning 10,000.00 15,000.00 training program SRC Rule 30.2-9 Failure to submit names of Reprimand/Warning 10,000.00 15,000.00 stockholders, members, participants, clients, related information Section 32 Prohibition on the use of unregistered 200,000.00 exchange; failure to renew license; regulation of over the counter market SRC Rule 32.1 Trading of unregistered securities or B/D-P100,000.00 P150,000.00 P200,000.00 in unregistered exchange/market AP/S-P50,000.00 P75,000.00 P100,000.00 SRC Rule 32.2 (a) Best execution rule B/D-P50,000.00 P75,000.00 P100,000.00 AP/S-P25,000.00 P50,000.00 P75,000.00 SRC Rule 33.2 (c) Composition of the board of an Reprimand/Warning 100,000.00 150,000.00 exchange SRC Rule 33.2 (c) Failure to comply with the ownership P100,000.00- P150,000.00- P200,000.00- limit requirement P100.00/day of delay P100.00/day of delay P100.00/day of delay SRC Rule 33.2 (d) Failure of an exchange to protect P100,000.00- P150,000.00- P200,000.00- customer accounts in case of P100.00/day of delay P100.00/day of delay P100.00/day of delay business failure SRC Rule 34.1-1 Violation of customer first policy Reprimand/Warning P25,000.00 P50,000.00 SRC Rule 34.1-2 Violation of chinese walls policy P25,000.00 P50,000.00 P100,000.00 SRC Rule 36-4.1 Failure to register as a transfer Reprimand/ P50,000.00- P75,000.00- agent Warning 100.00/day of delay 100.00/day of delay SRC Rule 36-4.2 Failure to submit: Reprimand/ P10,000.00- - Annual Report; Warning 100.00/day of delay Exception report; Periodic report to issuer; Annual audited financial statements; General information Sheet; Affidavit of non-holding of meeting; Monthly Reconciliation of PCD & TA; Monthly Certification as to number of shares Registered Under PCD Nominee; Notice of Change of Address; Other Required Reports. Failure to Maintain Reprimand/ P10,000.00 Compliant Log Warning P100.00/day of delay SRC Rule 36-4.3 Failure to retain required records Reprimand/ P10,000.00- P25,000.00- Warning 100.00/day of delay P100.00/day of delay SRC Rule 39.1-1(D) Failure to supervise listed companies Reprimand/Warning P50,000.00 P75,000.00 SRC Rule 39.1-1(E) Failure to comply with requirements Reprimand/Warning P100,000.00 P150,000.00 on compliance & surveillance SRC Rule 39.1-1(F) Failure of SRO to submit examination Reprimand/Warning P100,000.00 P25,000.00 calendar or notify of any amendment thereto SRC Rule 39.1-1(F) Failure of SRO to examine members Reprimand/Warning P50,000.00 P75,000.00 during one examination cycle SRC Rule 39.1-1(F) Failure of SRO to file monthly reports Reprimand/Warning P10,000.00 P25,000.00 of its periodic examination SRC Rule 39.1-1(f) Failure of SRO to send deficiency Reprimand/Warning P50,000.00 P75,000.00 letter, if warranted SRC Rule 39.1-1(F) Failure of SRO to initiate Reprimand/Warning P50,000.00 P75,000.00 investigation, if warranted SRC Rule 39.1-1(G-i) Failure of SRO to investigate Reprimand/Warning P50,000.00 P75,000.00 suspected violations of SRC sections 24, 26, 27 SRC Rule 39.1-1(G-ii) Failure of SRO to investigate violation Reprimand/Warning P50,000.00 P75,000.00 of rules on sales practices, etc. SRC Rule 39.1-1(G-iii) Failure of SRO to notify the Reprimand/Warning P10,000.00 P25,000.00 commission of investigation of violation of SRC sections 24, 25, 26, 27 SRC Rule 39.1-1(H) Failure to comply with rules on Reprimand/Warning P50,000.00 P75,000.00 discipline of SRO members & participants SRC Rule 39.1-1(I) Failure to comply with disciplinary Reprimand/Warning P50,000.00 P75,000.00 action of the commission SRC Rule 39.1-1(J) Failure of SRO to file required report Reprimand/Warning P10,000.00 P25,000.00 SRC Rule 39.1-2(B) Failure to register as an SRO Reprimand/Warning P200,000.00 - (SEC Form 39) SRC Rule 39.1-2(C) Failure to amend SRC Form 39 Reprimand/Warning P25,000.00 P50,000.00 SRC Rule 39.1-2(D) Failure of SRO to file annual Reprimand/Warning P10,000.00 P25,000.00 return (SEC Form 39-AR) SRC Rule 39.1-2(F) Failure of SRO to send to the Reprimand/Warning P10,000.00 P25,000.00 commission copies of notices, reports or records of changes covered by amendments. SRC Rule 39.1-3 Failure to comply with rules on Reprimand/Warning P10,000.00 P25,000.00 allocation of regulatory responsibilities among SROs Section 40.2 Failure of SRO to comply with Reprimand/Warning P10,000.00 P25,000.00 SRC provisions SRC Rule 40.3 Failure of SRO, Registered exchange Reprimand/Warning P10,000.00- P25,000.00- or trading participant and any P100.00/day of delay P100.00/day of delay registered clearing agency to submit proposed rule or amendment thereto or to observe procedure on rule making SRC Rule 40.4 Failure of SRO, registered exchange Reprimand/Warning P10,000.00- P25,000.00- or trading participant and clearing P100.00/day of delay P100.00/day of delay agency to comply with the commission's order to effect changes in its rule/practice Section 40.6 Failure of SRO to discipline a Reprimand/Warning P50,000.00 P75,000.00 member or participant Section 40.7 Failure of SRO to notify the Reprimand/Warning P10,000.00- P25,000.00- commission of any disciplinary P100.00/day of delay P100.00/day of delay sanction on any member Section 41 Use of unregistered clearing Reprimand/Warning P200,000.00 - agency SRC Rule 42-1(A) Failure to register as clearing Reprimand/Warning P200,000.00 - agency SRC Rule 42-1(B) Failure of clearing agency to pay Reprimand/Warning P50,000.00- P75,000.00- prescribed annual fee P100.00/day of delay P100.00/day of delay SRC Rule 42-1(D) Failure to amend application Reprimand/Warning P25,000.00- P50,000.00- information P100.00/day of delay P100.00/day of delay SRC Rule 42-1(E) Failure of clearing agency to file Reprimand/Warning P10,000.00- P25,000.00- with annual audited balance P100.00/day of delay P100.00/day of delay sheet etc. SRC Rule 42-2 Failure to report breaches of rules Reprimand/Warning P10,000.00- P25,000.00- or difficulties by participant P100.00/day of delay P100.00/day of delay SRC Rule 48.1 Margin Requirement Reprimand/Warning 10,000.00 15,000.00 SRC Rule 49.1-1 Net Capital Rule: Below 5% of Reprimand/Warning Voluntary suspension aggregate indebtedness or 5 million, whichever is higher Daily determination Reprimand/Warning 10,000.00 15,000.00 & should be available anytime upon 100/day of delay P100/day of delay request If below 120%, submit daily Reprimand/Warning 10,000.00 15,000.00 computation P100/day of delay P100/day of delay Late filing of FINOP Reprimand/Warning 10,000.00 15,000.00 report. P100/day of delay P100/day of delay SRC Rule 49.1-1 Effect proposal (measures to Reprimand/Warning 10,000-P100/day of delay; 15,000-P100/day of delay; be taken) within 10 days; Erroneous computation Reprimand/Warning 10,000.00 15,000.00 Using the required format Reprimand/Warning 10,000.00 15,000.00 SRC Rule 49.1-1(H) Violation of Limitation on Reprimand/Warning 25,000.00 50,000.00 withdrawal of equity capital SRC Rule 49.2 Customer protection reserves Reprimand/Warning 25,000.00 50,000.00 & custody of securities SRC Rule 49.2-4 Violation of special reserve account Reprimand/Warning 25,000.00 50,000.00 SRC Rule 49.3 Lending & Voting customers Reprimand/Warning 25,000.00 50,000.00 securities SRC Rule 50 Purchases and sales in cash Reprimand/Warning 10,000.00 15,000.00 account: - T+3 violation; - Failure to liquidate (per transaction, no maximum) SRC Rule 52.1-1 Books and records Rule: Non current; Reprimand/Warning; 25,000.00- 50,000.00- P200.00/day of delay P200.00/day of delay Not available Immediate suspension Immediate suspension - SRC Rule 52.1-2 Records Retention Rule: Preservation for 5 years; Reprimand/Warning 25,000.00 50,000.00 Accessible for 2 years; Reprimand/Warning 10,000.00 15,000.00 Ceased operation 25,000.00 50,000.00 SRC Rule 52.1-4 Report of Exchange members, Reprimand/Warning P10,000.00 P15,000.00 brokers, dealers trading through members SRC Rule 52.1-5 Failure to file annual audited Reprimand/Warning P10,000.00- P15,000.00- financial reports of brokers, P100.00/day of delay P100.00/day of delay dealers within the period SRC Rule 52.1-6 Customer account information rule Reprimand/Warning P10,000.00 P15,000.00 (Maximum of 10 clients) SRC Rule 52.1-7 Order Ticket Rule (Maximum of 10) Reprimand/Warning P10,000.00 P15,000.00 SRC Rule 52.1-8 Failure to send customer account statement monthly Reprimand/Warning P10,000.00 P15,000.00 SRC Rule 52.1-9 Failure to preserve separate file Reprimand/Warning P10,000.00 P15,000.00 of complaints received and action taken SRC Rule 52.1-10 Monthly securities count by broker, Reprimand/Warning P10,000.00.00 P15,000.00 dealer PRE-NEED Rules (Implementing Rules of Section 16 of the SRC) Pre-need Rule Violations First Offense Second Offense Third Offense Rule 3; Rule 35.1 Issuing, offering for sale or selling 1% of the amount of transaction 2% of the amount of each 6% of the amount of each pre-need plans without prior or P10,000 per transaction, transaction or P20,000 per transaction or P60,000 per registration with SEC whichever is higher. transaction, whichever is transaction, whichever is higher higher. Rule 4 Failure to amend registration statement in accordance with SRC Rule 14. Change in the P10,000 plus P100 per day P20,000 plus P200 per day P60,000 plus P600 per day of delay qualitative terms and conditions of delay of delay of the plans Rule 6.1.a; SEC Memo Price increase made without prior 1% of the amount of each sale 2% of the amount of each 6% of the amount of each sale Circular No. 3, Series of approval of SEC in excess of the authorized sale in excess of the authorized in excess of the authorized shares 2002 price, or P10,000 price, or P20,000 per or price, or P60,000 per per transaction, whichever transaction, whichever is transaction, whichever is higher, is higher, plus P100 per day of higher, plus P200 per day of plus P600 per day of delay delay in obtaining approval. delay in obtaining approval. in obtaining approval. Rule 6.1.b Resale of cancelled or lapsed plans P50,000 P100,000 P200,000 Rule 6.1.c, 15.4 and 15.6 Unregistered and unlicensed Reprimand/Warning P50,000 plus P300 per day P100,000 plus P600 per day salesmen or general agent of continuing violation of continuing violation. Rule 6.1.d; Rule 33 Failure to secure prior SEC Approval Reprimand/Warning P50,000 plus P300 per day P100,000 plus P600 per day to the following: of continuing violation. of continuing violation. 1. Appointment of salesmen or general agent; or 2. Opening, closure or transfer of branches. Rule 6.1.f and 16.1 Failure to comply with trust fund Reprimand/Warning P50,000 plus P300 per day P100,000 plus P600 per day deposit rates used in the actuarial of continuing violation of continuing violation studies submitted under rule 4.1 par. 7(i)(c) Rule 6.1.i Impairment of capital Reprimand/Warning P50,000 plus P300 per day P100,000 plus P600 per day of continuing violation of continuing violation Rule 35.4 Audited Financial Statements: P25,000 plus P500 per day P50,000 plus P1,000 per day P100,000 plus P1,000 per of violation of violation day of violation Failure to comply with any of the requirements of PNUCA under Pre-need rule 31; or Incomplete disclosure per SRC Rule 68 Material Misstatement in the P50,000 or 1/10 of 1% of the P100,000 or 1/10 of 2% of the P200,000 or 1/10 of 6% of the Financial Report amount of misstatement, amount of misstatement, amount of misstatement, whichever whichever is higher, plus P500 whichever is higher, plus is higher, plus P2,000 per per day of continuing violation. P1,000 per day of continuing day of continuing violation violation Rule 35.5; Rule 8.1 Misrepresentation or misleading P100,000 plus P500 per day of P200,000 plus P1,000 per day P400,000 plus P2,000 per day of statements in any filings required continuing violation of continuing violation continuing violation to be submitted to the commission (This is in addition to the penalty on the principal report, if any.) Failure to submit any of the Reprimand/Warning P25,000 plus P500 per day P50,000 plus P1,000 per day of certifications on corporate of violation violation governance which were represented to be submitted Any misrepresentation in the Reprimand/Warning P50,000 plus P500 per day of P100,000 plus P1,000 per day of submitted manual on corporate continuing violation continuing violation governance Rule 6.1.j; Rule 23.1.2 Failure to publish the audited Reprimand/Warning P50,000 plus P500 per day of P100,000 plus P1,000 per day of financial statements within 120 continuing violation continuing violation days after the end of fiscal year Rule 6.1.k Failure to provide a disclaimer per Reprimand/Warning P50,000 plus P500 per day of P100,000 plus P1,000 per day of SEC Memo Circular No. 4, series continuing violation continuing violation of 2004 Rule 6.1.n Violation of any other condition Reprimand/Warning P50,000 plus P300 per day of P100,000 plus P600 per day of imposed in the certificate of continuing violation continuing violation registration or permit to sell Rule 7.1 Failure to constitute a complaints Reprimand/Warning P50,000 plus P300 per day of P100,000 plus P600 per day of action unit continuing violation continuing violation Rule 7.2 Failure to designate a Reprimand/Warning P50,000 plus P300 per day of P100,000 plus P600 per day of compliance officer continuing violation continuing violation Failure to timely disclose change Reprimand/Warning P30,000 plus P200 per day P40,000 plus P400 per day of compliance officer of delay of delay Rule 7.3 Late filing of required list: accredited Reprimand/Warning P50,000 plus P300 per day P100,000 plus P600 per day mortuaries, telephone numbers and of continuing violation of continuing violation contact person of pre-need selling life plan Rule 8.3 Refusal to furnish information Reprimand/Warning P50,000 plus P300 per day P100,000 plus P600 per day of required by the commission of continuing violation continuing violation Rule 9.2 Failure to produce all the books and P100,000 plus P500 per P200,000 plus P1,000 per P400,000 plus P2,000 per records of the pre-need company for day of delay day of delay day of delay examination of SEC auditors Rule 9.3 Refusal of the issuer to permit P100,000 plus P500 per P200,000 plus P1,000 per P400,000 plus P2,000 per examination of a financial and day of delay day of delay day of delay related documents to be made by the commission Rule 12.1 Failure to obtain SEC approval P50,000 plus P300 per day of P100,000 plus P600 per day P200,000 plus P800 per day on the amendment of any: Pre-need continuing violation of continuing violation of continuing violation Plan Contract; Trust Agreement; Other pertinent documents Rule 13.3 Information brochure is not Reprimand/Warning P50,000 P100,000 accurately reflecting the terms of the plan or the financial ability of the pre-need company Rule 15.1 Operation without prior SEC P100,000 plus P300 per day of P200,000 plus P600 per day P300,000 plus P800 per day Registration as dealer continuing violation of continuing violation of continuing violation Rule 16.4 Withdrawal from trust fund other Reprimand/Warning P50,000 plus P300 per day P100,000 plus P600 per day than the planholders' benefit (This of continuing violation of continuing violation is imposable upon the Trustee) Rule 17 Failure to create or maintain the Reprimand/Warning P50,000 plus P300 per day P100,000 plus P600 per day required investment portfolio (This of continuing violation of continuing violation is imposable upon the trustee) Rule 18 Failure to comply with the liquidity Reprimand/Warning P50,000 plus P300 per day P100,000 plus P600 per day reserve requirement (This is of continuing violation of continuing violation imposable upon the Trustee) Rule 19 Failure to make additional deposits Reprimand/Warning P50,000 plus P300 per day P100,000 plus P600 per day to trust fund to cover deficiencies of continuing violation of continuing violation within the prescribed period Rule 20.1 Failure of the trustee to exercise due Reprimand/Warning P50,000 plus P300 per day P100,000 plus P600 per day of diligence for the protection of the of continuing violation continuing violation planholders (This is imposable upon the Trustee) Rule 20.2 Investment of the trust fund to Reprimand/Warning P50,000 plus P300 per day P100,000 plus P600 per day DOSRI or prohibited accounts of continuing violation of continuing violation (This is imposable upon the Trustee) Rule 21 Failure to comply with the directive Reprimand/Warning P50,000 plus P300 per day P100,000 plus P600 per day of the commission to convert of continuing violation of continuing violation the trust fund assets of the investment to protect the interest of the planholders (This is imposable upon the Trustee) Rule 22 Encumbrance, conveyance or P100,000 plus P500 per day P200,000 plus P1,000 per day P400,000 plus P2,000 per day mortgage over all or substantially upon discovery upon discovery upon discovery all the assets of the issuer without prior approval of the commission. Rule 23 Non-filing or late filing of any of the Reprimand/Warning P100,000 plus P500 per day P200,000 plus P1,000 per day following: of delay of delay Audited Financial Statements; Actuarial Valuation Report; Corporate Governance Manual 23.1-23.1.2 Incomplete Report Reprimand/Warning P10,000 plus P200 per day of P20,000 plus P400 per day (This shall be in delay of filing the amended of delay of filing the amended addition to the penalty for report report late filing of the report per due date under the Rules) Rule 24 Non-filing/late filing of Quarterly Reprimand/Warning P50,000 plus P300 per day P60,000 plus P600 per day Reports of delay of delay Rule 24.1-24.4 Incomplete Quarterly Report Reprimand/Warning P20,000 plus P300 per day P40,000 plus P600 per day (This shall be in addition to the of delay of filing the amended of delay of filing the amended penalty for late filing of the report report report per due date under the Rules.) Rule 25 Non-filing/late filing of following Reprimand/Warning P50,000 plus P300 per day P60,000 plus P600 per day monthly reports: of delay of delay Sales Reports; Collection Reports; Trust Fund Deposits; List of Salesmen Terminated and Apprenticeship; Trust Fund Statement Rule 35 Payment of excessive commission Reprimand/Warning P50,000 plus P300 per day P100,000 plus 600 per day of continuing violation of continuing violation Rule 35.3 Overpricing of plans Reprimand/Warning P50,000 plus P300 per day P60,000 plus P300 per day of from time of discovery from time of discovery Investment Company Act & ICA Rule 35-1 ICA/Rule 35 Description First Second Third Provisions Offense Offense Offense Sections 7 and 24 Violation of registration 1% of the amount of each 2% of the amount of each 3% of the amount of each requirements transaction P10,000 per transaction or P20,000 per transaction or P60,000 per transaction, whichever transaction, whichever transaction, whichever is higher. is higher. is higher. Section 8 Election of certain ineligible P50,000 plus P300 per day P100,000 plus P600 per day P150,000 plus P1,800 affiliated persons and of continuing violation of continuing violation per day of continuing violation underwriters Section 9 Unauthorized affiliations of P50,000 plus P300 per day P100,000 plus P600 per day P200,000 plus P1,800 per day directors, officers and employees of continuing violation of continuing violation of continuing violation Section 10 Prohibited offers to exchange P50,000 plus P300 per day P100,000 plus P600 per day P200,000 plus P1,800 per day securities of continuing violation of continuing violation of continuing violation Section 11 Unauthorized or illegal activities of P50,000 plus P300 per day P100,000 plus P600 per day P200,000 plus P1,800 per day investment companies of continuing violation of continuing violation of continuing violation Section 12 Unauthorized changes in P50,000 plus P300 per day of P100,000 plus P600 per day P200,000 plus P800 per day investment policy continuing violation of continuing violation of continuing violation (Imposable on responsible directors and officers) Section 14 Unauthorized contracts of advisers P50,000 plus P300 per day of P100,000 plus P600 per day P200,000 plus P800 per and underwriters (Imposable on continuing violation of continuing violation. day of continuing violation responsible directors and officers) Section 22 and 23; Violation of requirements on P50,000 plus P300 per day of P100,000 plus P600 per day P200,000 plus P800 per day ICA Rule 35-1 (e) distribution, redemption, and continuing violation of continuing violation of continuing violation repurchase of securities Section 26 Excessive periodic payment plan Reprimand/Warning P50,000 plus P300 per day P100,000 plus P600 per day of continuing violation of continuing violation Section 25, 27 & 30; Failure to submit required reports Reprimand/Warning P10,000 plus P200 per day P20,000 plus P400 per day ICA Rule 35-1 (e)(3) under these sections and/or to of continuing violation of continuing violation publish daily prices Section 32 Misrepresentations P50,000 plus P300 per day P100,000 plus P600 per day P300,000 plus P1,800 per day of continuing violation of continuing violation of continuing violation ICA Rule 35-1(d) Violation of recited investment Reprimand/Warning P50,000 plus P300 per day P100,000 plus P600 per day objectives, policies and restrictions of continuing violation of continuing violation ICA Rule 35-1(c)(2) Non-deposit of sales proceeds P10,000 plus P200 per day P20,000 plus P400 per day P50,000 plus P600 per day to a custodian bank of continuing violation of continuing violation of continuing violation ICA Rule 35-1(c)(3) Redemption of original capital Reprimand/Warning P10,000 per redemption P20,000 per redemption for less than 12 months ICA Rule 35-1(i)(2) Late filing of monthly sales/ Reprimand/Warning P10,000 plus P200 per day P20,000 plus P400 per day redemption report of continuing violation of continuing violation ICA Rule 35-1(e)(3) Failure to effect redemption request Reprimand/Warning P10,000 per redemption P20,000 per redemption within 7 banking days Section 35 ICA Rule 35-1 Failure to register as an investment Reprimand/Warning P100,000.00 - (g)(1); company adviser; ICA Rule 35-1(g)(1)-A Failure to maintain Reprimand/Warning P25,000.00 the minimum unimpaired net worth of at least P10 M exclusive of revaluation surplus Section 40 Failure to register agents & investment solicitors: Company; Reprimand/Warning P10,000.00 P15,000.00 Individual 5,000.00 7,000.00 Financing Company Act and Its Implementing Rules FRA/IRR Provisions Description First Offense Second Offense Third Offense Sec. 7(c), FCA of 1998; Engaging in the business of a P10,000 plus P100 per day P20,000 plus P300 per day P30,000 plus P500 per day Section 4(a), IRR financing company without certificate of authority (CA) to operate as a financing company Section 5(b), IRR Failure to operate within 120 days P10,000 plus P100 per day P15,000 plus P200 per day P20,000 plus P300 per day from grant of CA Section 6(a), IRR No CA to establish/operate a branch P10,000 plus P100 per day P10,000 plus P200 per day P10,000 plus P300 per day office Section 8, IRR Late payment of annual fee before Reprimand/Warning P10,000 plus P100 per day P10,000 plus P200 per day the anniversary date of CA Section 9(a), IRR Investment in real estate and in Reprimand/Warning P10,000 plus P100 per day P10,000 plus P300 per day shares of stock in a real estate development corporation and other real based projects in excess of 25% of the company's networth Section 9(b), IRR Less than 51% of the funds have Reprimand/Warning P10,000 plus P100 per day P10,000 plus P300 per day not been used in financing company activities Section 9(c), IRR Total credit extended to company's Reprimand/Warning P10,000 plus P100 per day P10,000 plus P300 per day directors, officers, stockholders and related interest (DOSRI) in excess of 15% of the former's networth Section 9(d), IRR Total credit extended to third person Reprimand/Warning P10,000 plus P100 per day P10,000 plus P300 per day (single borrower limit) in excess of 30% of the company's networth Section 11, IRR Impairment of paid-up capital Reprimand/Warning P10,000 P15,000 Section 13(a), IRR Late filing of Quarterly Reports Reprimand/Warning P10,000 plus P100 per day P10,000 plus P200 per day Section 13(b), IRR Late filing of Annual Audited Reprimand/Warning P10,000 plus P100 per day P10,000 plus P200 per day Financial Statements AMLA, as amended Failure to file Anti-money P100,000 - - laundering operating manual SEC Circular No. 2, Failure to timely submit manual Reprimand/Warning P500 per day - S. 2002 on corporate governance Failure to submit any of the Reprimand/Warning P10,000 plus P100 per day P10,000 plus P200 per day following certification, as represented in the manual: Certification by Corporate Secretary on the Attendance of Directors Certification by the Compliance Officers on the Extent of Compliance with Manual on Corporate Governance Failure to Comply with Other Reprimand/Warning P10,000 plus P200 per day P10,000 plus P300 per day Representations in the Manual of Corporate Governance Continued non-payment of the assessed fine and/or failure to comply with the requirement, despite notice and hearing for a period of fifteen (15) days, shall be a sufficient ground for the Commission to take other appropriate action or remedies available under the Securities Regulation Code and other related laws. DTaAHS The commission of a fourth offense for the same violation is a ground for the suspension/revocation of the erring company's registration or secondary license which shall be made after notice and hearing, in accordance with the above-mentioned procedures. Erring companies which are primarily regulated by other government agencies shall be endorsed thereto. The imposition of the foregoing penalties shall be without prejudice to the imposition of other administrative sanctions or to the filing of criminal charges against the person/s responsible for the violation. The Circular shall be published in two (2) newspapers of general circulation in the Philippines and shall take effect within fifteen (15) days after the date of the last publication. Signed on behalf of the Commission on September 22, 2005, Mandaluyong City, Philippines. (SGD.) FE B. BARIN Chairperson