Methods and practices in the Philippine stock market and effective prevention through legal remedies

• Main Author: Coherco, Calvin Ryan Ong
• Format: text
• Language: English
• Published: Animo Repository 2011
• Subjects: Stock exchanges—Law and legislation—Philippines; Stock exchanges—Philippines; Commercial Law; Finance and Financial Management
• Online Access: https://animorepository.dlsu.edu.ph/etd_masteral/6591; https://animorepository.dlsu.edu.ph/context/etd_masteral/article/12948/viewcontent/CDTG004917_P.pdf
• Institution: De La Salle University

Securities fraud comes in many different and dynamic forms. Some of the most popular are insider trading and price manipulation. These activities go way back in time that every stock market player, trader and lawyer should know that these manipulations are unfair practices and treated as illegal. The task of regulating and adopting measures to reduce, if not eliminate, such irregularities befalls upon the Securities and Exchange Commission and to a certain extent, to the Self Regulatory Organizations, which are directly under the oversight power of the former. In the Philippines, it is only the Philippine Stock Exchange that has been granted such status. One of the reasons why Philippine securities law recognizes the existence of a Self-Regulatory Organization is exactly to delegate to them the power to regulate the stock market since they are also in charge of sustaining the market. Historically, Philippine securities laws have evolved through time. They were first embodied under the Blue Sky Law (Act No. 2851), then the Securities Act (Commonwealth Act No. 83), then The Revised Securities Act (Batas Pambansa Blg. 178), and finally, The Securities Regulation Code (Republic Act No. 8799). But the mere existence of these measures prohibiting insider trading and other forms of securities fraud seems inadequate to provide a fair, efficient, transparent and apolitical stock market and ensure its optimal development. As with every other law, strict and rigorous enforcement of the securities laws is the most basic and most fundamental thing to do. On this note, it should be mentioned that Philippine securities laws were patterned from the securities laws of the US, namely the Securities Act of 1933 and the Securities Exchange Act of 1934. This is worth mentioning because the US was the first country to have regulations on insider trading and other securities fraud. Aside from that, the US leads the world in the aspects of regulation and enforcement. The policies and the courses of action taken by the US regulatory entities has been largely viewed as the ―gold standard‖ for many emerging markets.