Rules Providing for the Freezing of the Price of a Security Listed in the Stock Exchanges at Certain Levels (as Amended)

March 10, 1976 RULES PROVIDING FOR THE FREEZING OF THE PRICE OF A SECURITY LISTED IN THE STOCK EXCHANGES AT CERTAIN LEVELS (AS AMENDED) For the purpose of maintaining sound and equitable trading in securities and to minimize undue speculation, the Commission, pursuant to the powers vested in it under existing laws, hereby adopts and promulgates the following rules: cdll * 1. Whenever the price of a security listed in a stock exchange moves 40% up or 30% down in the case of big board issues, and 100% up or 50% down in the case of small board issues, all to be reckoned from the last closing transaction, unless there is an official announcement from the company or the proper government agency which would justify such price fluctuations, the price of the, security shall automatically be frozen by the exchange upon reaching said limit. When this happens, the Chairman of the Board Control Committee or the Floor Trading and Arbitration Committee, as the case may be, or in his absence, any authorized member thereof shall immediately call up the Chairman or in his absence, the Associate Commissioner so designated or his authorized representative to inform him of such fact, who shall in turn call up the other exchanges to likewise freeze the prize at same level. The provisions of the preceding paragraph notwithstanding, trading may, upon prior approval by the Commission, be permitted at a price above or below the limits set forth above whenever the authorities of any particular stock exchange shall have determined that strict adherence to the requirements of the preceding paragraph would result in undue obstruction to the attainment of a liquid market for a particular issue or class of securities in cases hereunder enumerated, to wit: (a) Where a particular security has not been traded for more than one (1) month and unsolicited orders have been received for the purchase or sale thereof at a price above or below the price freezing level provided in the rules; and (b) Where the common stock of an issuer corporation has been classified into Class "A" and Class "B" shares and either one class of shares have not been traded for more than fifteen (15) calendar days immediately prior. Any action taken by the exchange in accordance with the provisions hereof shall be reported to the Commission, in writing, immediately. 2. In the afternoon of the same day, there shall be a meeting in the office of the Chairman between himself or his authorized representative, on the one hand, and the members of the Board Control or Floor Trading and Arbitration Committee and the officers of the issuer company involved on the other, to find out the cause or reason for such price behavior of the security in the exchanges. 3. On the following trading day, trading shall be continued and then shall automatically be unfrozen, unless, in the discretion of the Commission, such freezing should be continued and this fact made known to the Exchanges. 4. No broker or dealer shall trade over-the-counter beyond the prices set automatically by these rules. 5. Any violation of these rules shall subject the offending broker or dealer, who effects a transaction beyond the freezing level, and the Exchange, in which said transaction in violation of these freezing rules took place, to such fines or penalties as herein provided: 1st violation P 2,000.00 P 10,000.00 2nd violation 4,000.00 20,000.00 3rd violation 8,000.00 40,000.00 4th violation 15,000.00 80,000.00 5th violation 20,000.00 or 100,000.00 or and other suspension or suspension or succeeding revocation of revocation of violations license or both license or both such fine and such fine and suspension or suspension or revocation, in revocation, in the discretion of the discretion of the Commission. the Commission. If the violation results in actual damage to any person or entity, the Commission reserves the right to impose a heavier penalty than those prescribed above." 6. All rules or circulars inconsistent herewith are hereby amended or revoked. 7. These rules shall take effect immediately by agreement between the Exchanges and the Commission. prcd (SGD.) ANGEL L. LIMJOCO, JR. Chairman Securities and Exchange Commission Approved: March 15, 1976 (SGD.) TROADIO T. QUIAZON, JR. Secretary of Trade Footnotes * As amended on June 9, 1977.