Amending Further Sections 2, 3, 5, 6, And 8 Of Presidential Decree No. 902-A
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Amending Further Sections 2, 3, 5, 6, And 8 Of Presidential Decree No. 902-A
Presidential Decree No. 1758
January 2, 1981
Case Overview and Summary
Summary of Presidential Decree No. 1758Composition and Term of the Securities and Exchange Commission (SEC) (Section 1, 2)
- The SEC is a collegial body composed of a Chairman and four Associate Commissioners appointed by the President.
- The Chairman and two Associate Commissioners serve for 7 years, 5 years, and 3 years, respectively.
- The two additional Associate Commissioners serve for 5 years and 3 years.
- Upon expiration of term, a member continues to serve until a successor is appointed and qualified.
- Vacancies are filled only for the unexpired portion of the term.
Jurisdiction and Authority of the SEC (Section 2, 3)
- The SEC has absolute jurisdiction, supervision, and control over all corporations, partnerships, or associations granted primary franchises, licenses, or permits by the government to operate in the Philippines.
- The SEC can enlist the aid and support of, and deputize, any government enforcement agencies, civil or military, as well as private institutions, corporations, firms, associations, or persons.
Petitions for Suspension of Payments (Section 3)
- The SEC has jurisdiction over petitions of corporations, partnerships, or associations to be declared in a state of suspension of payments in cases where:
- The entity has sufficient property to cover all debts but foresees the impossibility of meeting them when due.
- The entity has insufficient assets to cover liabilities but is under the management of a Rehabilitation Receiver or Management Committee created pursuant to this Decree.
Powers of the SEC (Section 4)
- Appoint receivers of property subject to an action before the SEC, in accordance with the Rules of Court, to preserve the rights of parties and protect the interests of investors and creditors. (Section 6c)
- Appoint a Rehabilitation Receiver with additional functions and powers as provided in the Decree.
- Create and appoint a management committee, board, or body to undertake the management of corporations, partnerships, or associations in appropriate cases when there is imminent danger of dissipation, loss, wastage, or destruction of assets or paralyzation of business operations. (Section 6d)
- The management committee or rehabilitation receiver has the power to take custody and control over all existing assets and property, evaluate assets and liabilities, determine the best way to salvage and protect the interests of investors and creditors, study the feasibility of continuing operations and restructure or rehabilitate the entities, and report to the SEC.
- The SEC may order the dissolution and liquidation of the entity if continuance in business is determined to be unfeasible or unprofitable.
- The management committee or rehabilitation receiver can overrule or revoke the actions of the previous management and board of directors.
- The management committee or rehabilitation receiver is not subject to any action, claim, or demand for acts done in good faith in the exercise of its functions.
- Issue subpoenas and summon witnesses in any proceedings of the SEC, and order the examination, search, and seizure of documents, papers, files, records, tax returns, books of accounts, deposits with banks, and investments, notwithstanding any law to the contrary. (Section 6h)
- Exercise powers provided by law or implied from, or necessary or incidental to, the express powers granted to achieve the objectives and purposes of this Decree. (Section 6m)
Departmental Structure of the SEC (Section 5)
- The SEC has nine departments, each headed by a director:
1. Corporate and Legal
2. Examiners and Appraisers
3. Brokers and Exchanges
4. Money Market Operations
5. Securities Investigations and Clearing
6. Administrative and Finance
7. Prosecution and Enforcement
8. Supervision and Monitoring
9. Departments
- The staffing pattern to implement the amended departmental structure shall be approved pursuant to Section 40 of P.D. No. 1177, with additional costs for 1980 and 1981 charged to the Special Activities Fund upon approval by the President.
Prosecution and Enforcement Department (Section 6)
- Has the exclusive authority to investigate, on complaint or motu propio, any act or omission of the Board of Directors/Trustees of corporations, partnerships, or associations, or their stockholders, officers, or partners, including fraudulent devices, schemes, or representations, in violation of any law or rules and regulations administered and enforced by the SEC.
- Can file and prosecute criminal or civil cases before the SEC or the proper court or body upon prima facie finding of violation of any laws or rules and regulations administered and enforced by the SEC.
- Performs other powers and functions provided by law or delegated by the SEC.
- Prosecution under this Decree is without prejudice to any liability for violation of the Revised Penal Code.
Supervision and Monitoring Department (Section 7)
- Has the power of supervision over all corporations, partnerships, and associations registered with the SEC regarding their compliance with laws, mandatory provisions, and requirements of pertinent rules and regulations administered and enforced by the SEC, as well as their respective by-laws approved by the SEC.
- Integrates, analyzes, and evaluates ongoing operations or activities of such entities, coordinates with and recommends to the appropriate departments for proper action and enforcement, and performs other functions delegated by the SEC.
Forfeiture, Seizure, and Confiscation (Section 8)
- The proceeds and effects of crimes committed by any person or entity in violation of the laws and regulations administered and enforced by the SEC shall be forfeited, seized, and confiscated in favor of the State upon order of the SEC, after due notice and hearing.
Repealing Clause (Section 9)
- Any provisions of existing law, decree, order, rules, and regulations inconsistent with this Decree are hereby repealed, amended, or modified accordingly.
Effectivity (Section 10)
- This Decree shall take effect immediately.
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Amending Further Sections 2, 3, 5, 6, And 8 Of Presidential Decree No. 902-A
Presidential Decree No. 1758
•January 2, 1981
MALACAÑANGM a n i l a
PRESIDENTIAL DECREE No. 1758
AMENDING FURTHER SECTIONS 2, 3, 5, 6, AND 8 OF PRESIDENTIAL DECREE NO. 902-A
WHEREAS, one of the objectives of the government as envisioned under Presidential Decree No. 902-A, as amended by P.D. 1653, is to attract and to mobilize investments, domestic and foreign, through the participation of private enterprises in activities identified as most contributive to the growth of the national economy;
WHEREAS, in order to attain this national objective, it is incumbent upon government to provide a favorable climate for investments to be vigorously mobilized to insure a wider and more meaningful equitable distribution of wealth;
WHEREAS, being the principal agency of the governing charged with the establishment of the needed atmosphere in all phases of the country's economic and industrial development, the Securities and Exchange Commission must be provided with the appropriate organizational structure, financial support and manpower capabilities commensurate with the scope of its tasks; and
WHEREAS, for these programs to succeed, there is now a pressing need to restructure the...
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