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 objectively it is
incumbent upon government to provide a favor-role 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 government
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 Securities and Exchange Commission not only to
make it a more potent, responsive and effective arm of the government but to
enable it to play a more effective role in the socio-economic development of the
country;

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the
Republic of the Philippines, by virtue of the powers vested in me by the
Constitution, and the authority vested in me by Presidential Decree No. 1416, do
hereby order and decree;

SECTION 1. The first and second paragraphs of Section 2 of
Presidential Decree No. 902-A, as amended by Presidential Decree No. 1653, is
hereby further amended to read as follows:

“SEC. 2. That the Commission shall be a collegial body
composed of a Chairman and four (4) Associate Commissioners who shall be
appointed by the President and the term of office of each member shall be seven
(7) years; Provided, however, That the Chairman and the two Associate
Commissioners of the Commission first appointed by the President shall serve for
a period of seven (7) years; five (5) years and three (3) years as continue in
Office in accordance with the terms fixed in their current respective
appointments, and the two additional Associate Commissioners first appointed by
the President under this Decree, as amended, shall serve for five (5) years and
three (3) years as fixed in their respective appointments; Provided,
further, That upon the expiration of his term, a member shall serve as such
until his successor shall have been appointed and qualified; and Provided,
finally, That no vacancy shall be filled except for the unexpired portion
of the term.

The Commission shall meet as often as may be necessary on such day or days as
the Chairman may fix. The notice of the meeting shall be given to all members of
the Commission and the presence of at least three (3) shall constitute a quorum.
In the absence of the Chairman, the more senior Associate Commissioner shall act
as presiding officer of the meeting.”

SEC. 2. Section 3 of the same Presidential Decree, as
amended by Presidential Decree No. 1653, is hereby further amended to read as
follows:

“SEC. 3. The Commission shall have absolute jurisdiction,
supervision and control over all corporations, partnerships or associations, who
are the grantees of primary franchises and/or a license or permit issued by the
government to operate in the Philippines, and in the exercise of its authority,
it shall have the power to enlist the aid and support of and to deputize any and
all enforcement, agencies of the government, civil or military as well as any
private institution, corporation, firm, association or person.”

SEC. 3. Section 5 of the same Presidential Decree is hereby
amended by adding thereunder sub-paragraph (d) to read as follows:

“d) Petitions of corporations, partnerships or association to be declared in
the state of suspension of payments in cases where the corporation, partnership
or association possesses sufficient property to cover all its debts but foresees
the impossibility of meeting them when they respectively fall due or in cases
where the corporation, partnership or association has no sufficient assets to
coyer its liabilities, but is under the management of a Rehabilitation Receiver
or Management Committee created pursuant to this Decree.”

SEC. 4. Sub-paragraph c), d), h) and m) of Presidential
Decree No. 902-A, as amended by Presidential Decree No. 1653, is hereby further
amended to read as follows:

“c) To appoint one or more receivers of the property, real and personal,
which is the subject of the action pending before the Commission in accordance
with the pertinent provisions of the Rules of Court in such other cases whenever
necessary in order to preserve the rights of the parties-litigants and/or
protect the interest of the investing public and creditors. Provided,
however, that the Commission may, in appropriate cases, appoint a
Rehabilitation Receiver who shall have, in addition to the powers of a regular
receiver under the provisions of the Rules of Court, such functions and powers
as are provided for in the succeeding paragraph d) hereof.
Provided, further, that upon appointment ox a management committee,
rehabilitation receiver, board or body, pursuant to this Decree, all actions for
claims against corporations, partnerships or associations under management or
receivership pending before any court, tribunal, board or body shall be
suspended accordingly,”

“d) To create and appoint a management committee, board, or body upon
petition or motu propio to undertake the management of corporations,
partnerships or other associations in appropriate cases when there is imminent
danger of dissipation, loss, wastage or destruction of assets or other
properties or paralization of business operations of such corporations or
entities which may be prejudicial to the interest of minority stockholders,
parties-litigants or the general public.

The management committee or rehabilitation receiver, board or body shall have
the power to take custody of and control over, all the existing assets and
property of such entities under management to evaluate the existing, assets and
liabilities, earnings and operations of such corporations, partnerships or other
associations; to determine the best way to salvage and protect the interest of
the investors and creditors; to study, review and evaluate the feasibility of
continuing operations and restructure and rehabilitate such entities if
determined to be feasible by the Commission. It shall report and be responsible
to the Commission until dissolved by order of the Commission. Provided,
however, That the Commission, may, on the basis of the findings and
recommendation of the management committee, of rehabilitation receiver, board or
body, or on its own findings, determine that the continuance in business or such
corporation or entity would not be feasible or profitable nor work to the best
interest of the stockholders, parties-litigants, creditors, or the general
public, order the dissolution of such corporation entity and its remaining
assets liquidated accordingly. The Management committee or rehabilitation
receiver, board or body may overrule or revoke the actions of the previous
management and board of directors of the entity or entities under management
notwithstanding any provision of law, articles of incorporation or by-laws to
the contrary.

The management committee, or rehabilitation receiver, board or body shall not
be subject to any action, claim or demand for, or in connection with, any act
done or omitted to be done it in good faith in the exercise of its functions, or
in connection with the exercise of its power herein conferred.”

“h) To issue subpoena duces tecum and summon witnesses to appear in any
proceedings of the Commission and in appropriate cases order the examination,
search and seizure of all documents, papers, files and records, tax returns,
books of accounts, as well as all deposits of whatever nature with bank or
banking institutions in the Philippines, including investments in bonds issued
by the Government of the Philippines, its political subdivisions and its
instrumentalities and similar documents, of any entity or person under
investigation as may be necessary for the proper disposition of the cases before
it, notwithstanding the provisions of any law to the contrary.

“m) To exercise such other powers as may be provided by law as well
as those which may be implied from, or which are necessary or incidental to the
carrying out of, the express powers granted to the Commission to achieve the
objectives and purposes of this Decree.”

SEC. 5. Section 8 of the same Presidential Decree, as
amended by Presidential Decree No. 1653, is hereby further amended to read as
follows:

“SEC. 8. The Commission shall have nine (9) departments each
to be headed by a director, namely: Corporate and Legal; Examiners and
appraisers; Brokers and Exchanges; Money Market Operations; Securities
Investigations and Clearing; Investment Research and Statistics; Administrative
and Finance; Prosecution and Enforcement; and Supervision and Monitoring
Departments.

The staffing pattern to implement this amended departmental structure shall
be approved pursuant to Section 40 of P.D. No. 1177, with any additional costs
incurred for 1980 and 1981 to be charged to the Special activities Fund of the
corresponding year upon approval by the President.”

SEC. 6. The Prosecution and Enforcement Department shall
have, subject to the Commission1a control and supervision, the exclusive
authority to investigate, on complaint or motu propio, any act or omission of
the Board of Directors/Trustees of corporations, or of partnerships, or of other
associations, or of their stockholders, officers or partners, including any
fraudulent devices, schemes or representations, in violation of any law or rules
and regulations administered and enforced by the Commission; to file and
prosecute in accordance with law and rules and regulations issued by the
Commission and in appropriate cases, the corresponding criminal or civil case
before the Commission or the proper court or body upon prima facie finding of
violation of any laws or rules and regulations administered and enforced by the
Commission; and to perform such other powers and functions as may be
provided by law or duly delegated to it by the Commission.

Prosecution under this Decree or any Act, Law, Rules and Regulations enforced
and administered by the Commission shall be without prejudice to any liability
for violation of any provision of the Revised Penal Code.

SEC. 7. The Supervision and Monitoring Department shall have
the power of supervision over all corporations, partnership and associations
registered with the Commission in all matters pertaining to their compliance
with the laws, mandatory provisions and requirements of pertinent rules and
regulations administered and enforced by the Commission, as well as their
respective by-laws duly -approved by the Commission, integrate, analyze and
evaluate ongoing operations or activities of such entities; coordinate with, and
recommend to the appropriate departments for proper action and enforcement; and
to do and perform such other functions as may be duly delegated by the
Commission.

SEC. 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 Commission shall be forfeited, seized and confiscated in favor
of the State upon order of the Commission, after fine notice and bearing.

SEC. 9. Any provisions of existing law, decree, order, rules
and regulations inconsistent with this Decree, is hereby repealed, amended or
modified accordingly.

SEC. 10. This Decree shall take effect immediately.

Done in the City of Manila, this 2nd day of January, in the year of Our Lord,
nineteen hundred and eighty one.

			(Sgd.) FERDINAND E. MARCOS President of the Philippines
	By the President:
	(Sgd.) JOAQUIN T. VENUS, JR.
		Deputy Presidential Executive Assistant