Rules and Regulations
To get a copy of the Rules and Regulations, please get in touch with the Secretariat.


Section 1. Statement of Objectives. The CMIC shall maintain the highest code of ethics, honor and integrity among its Trading Participants, establish, promote and indicate just and equitable principles of trade and business, and maintain the highest standards in the commercial and financial transactions of its Trading Participants among themselves and with the government and the public.

The CMIC shall maintain the integrity of the market and minimize the risk of the investing public by ensuring that Trading Participants adhere to all rules and code of conduct of the Exchange, the CMIC and all related legislative and regulatory requirements.

Section 2. Definitions. (a) In these Rules, the following capitalized words and expressions shall, unless the context requires otherwise, have the meanings ascribed to them hereunder:

"Associated Person" shall refer to a person who directly exercises control of supervisory authority, but does not include a salesman, or an agent or a person whose functions are solely clerical or ministerial.

"Clearing Agency" shall mean a clearing agency duly registered in accordance with the SRC and SRC Rules and designated by the Exchange as its clearing agency.

"CMIC" shall mean the Capital Markets Integrity Corporation.

"Code" shall mean the Securities Regulation Code.

"Commission" shall mean the Securities and Exchange Commission of the Philippines.

"Complaint" shall mean any written statement of a customer or any other interested party alleging a grievance involving the business of a Trading Participant or Issuer or a violation of the Securities Laws by a Trading Participant or Issuer.

"Days" shall mean trading days in the Exchange.

"DD" shall mean the Disclosure Department of the Exchange.

"Done Through Account" shall mean an account which a Trading Participant maintains with another Trading Participant and uses to effect transactions for its customers or the proprietary account of the Trading Participant

"Examination Findings" shall mean any violation of the Securities Laws and these Rules as determined during an examination conducted by CMIC.

"Examinee" shall mean a Trading Participant under examination or investigation by CMIC.

"Exchange" or "PSE" shall mean the Philippine Stock Exchange, Inc.

"Issuers" shall mean the companies whose securities are listed in the Exchange.

"ITD" shall mean the Information Technology Division of the Exchange.

"LD" shall mean the Listing Department of the Exchange.

"Risk Based Capital Adequacy Ratio" or "RBCA Ratio" shall refer to the minimum level of capital that has to be maintained by firms which are licensed, or securing a Broker Dealer license, taking into consideration the firm size, complexity and business risk. Such risks that are considered in determining the capital requirement include, among others, operational, position, counter-party, large exposure, underwriting, and margin financing risks.

"Rules" shall mean the CMIC Rules.

"Securities Laws" shall mean the Securities Regulation Code ("SRC"), its implementing rules and regulations (the "SRC Rules"), and the rules (including these Rules), circulars, directives and/or other issuances of the Commission, PSE or CMIC to govern Trading Participants, Issuers and other market participants.

"Secured Demand Note Agreement" shall mean a notarized agreement (including the related secured demand note) entered into by a Broker Dealer as borrower and a lender, evidencing or governing the contribution of a secured demand note to a Broker Dealer and the pledge of securities and/or cash with the Broker Dealer as collateral to secure payment of such secured demand note.

"SIPF" shall mean the fund under the Securities Investors Protection Fund, Inc.

"Subordination Agreement" shall mean either a subordinated loan agreement or a secured demand note agreement.

"Subordinated Loan Agreement" shall mean a notarized agreement evidencing or governing a subordinated borrowing of cash.

"Trading Halt" shall mean the temporary stoppage of the trading of a listed security in the Exchange.

"Trading Participants" shall mean brokers and/or dealers duly licensed by the Commission and authorized to exercise a Trading Right pursuant to the rules of the Exchange. Unless the context requires otherwise, the term shall include directors, officers, Associated Persons, Salesmen and other agents of Trading Participants.

"Trading-related Irregularities" shall mean any violation of Sections 24, 25, 26 and 27 of the Securities Regulation Code and their implementing rules and regulations (including SRC Rules 24.1(b)-1, 24.1(d), 24.2.2, 24.2-3, and 26.3), and Article XI-B of these Rules, including, but not limited to, manipulative and fraudulent practices and insider trading.

"Unusual Trading Activities" shall mean any abnormal movement in the price and/or trading volume in the market of a listed security as may reasonably give rise to suspicion of a Trading-related Irregularity.

Unless the context requires otherwise or unless otherwise defined herein, the terms used in these rules shall have the same meanings under the Securities Regulation Code and its implementing rules and regulations or other relevant rules of the Exchange.

Section 3. Enforcement and Observance of the Securities Laws. CMIC shall enforce compliance by Trading Participants and, in the proper case, by Issuers with the Securities Laws. Trading Participants shall be bound by and observe the following laws, rules and regulations which, except for these Rules, are incorporated as integral parts hereof by reference:

(a) The Securities Regulation Code and its implementing rules and regulations;

(b) The Anti-Money Laundering Law and its implementing rules and regulations;

(c) The Code of Conduct and Professional Ethics for Traders and Salesmen;

(d) These Rules; and

(e) Such other relevant laws and regulations.

Section 4. Official Publications. A Trading Participant shall state in its business letters, notices and other official publications or documents that it is a trading participant of The Philippine Stock Exchange, Inc., a member of SCCP and of the SIPF.

Section 5. Reporting Obligation of Trading Participants. Every Trading Participant shall prepare and file with the CMIC such periodic, special or other reports, which the Securities Laws, the Commission or the CMIC requires.

Every Trading Participant shall also prepare and file with CMIC, in such form and substance and within the period mandated by CMIC, such reports and other documents, which CMIC may order a Trading Participant to prepare and file to enforce compliance with the Securities Laws.

Section 6. Reports to be Verified Under Oath. Risk Based Capital Adequacy (RBCA) reports which a Trading Participant should prepare and file with CMIC under these Rules or the Securities Laws shall be verified under oath and signed by the President or the equivalent officer and the Associated Person; in case of financial reports and documents, the Chief Financial Officer or the equivalent officer (the "Executing Officers") of the Trading Participant. The verification shall state that:

(a) The Executing Officers have read the relevant report or document;

(b) Based on the Executing Officers' personal knowledge or based on authentic records, the statements in the report or document are true and correct;

(c) The report or document does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which such statements were made, not misleading; and

(d) Based on the Executing Officers' personal knowledge or based on authentic records, the financial statements, and other financial information included in the report or document, fairly present in all material respects the financial condition and results of operations of the Trading Participant.

Section 7. Continuing Liability. Subject to the relevant prescriptive period under the Code and other applicable laws, a Trading Participant shall not be relieved from any liability incurred while still in operation or be excused from the obligations to cooperate in an investigation even if it may cease to be registered or be stricken off the register by the Exchange for any reason whatsoever. The Trading Participant shall continue to be bound by these Rules and the Securities Laws with respect to any antecedent violation thereof by the Trading Participant.