Before the securities made available to the public they must be registered with SEC

Registration with SEC

Exempt securities- those enumerated in the law that don’s require prior reg. w/sec

- No need to undergo registration with the SEC

Examples:
- securities issued by the government, state or it’s political subdivision (Reason: the
state will not defraud its own citizens/people)
- Securities issued by foreign government that has diplomatic relationship with the
Philippines
- Securities issued by corporations which are under the supervision of office of the
insurance commissioner, HLURB or BIR
- Securities issued by a bank except its own shares of stocks (Reason: banks receive
money from its depositors, and for the money that banks received from its
depositors, it pays interest. As Civil code provides, the relationship between the
bank and its depositor is debtor and creditor. Banks from time to time come out
with so called products, that if you have 100,000 it will issue to you certificates for
which represent your investment and with a guarantee rate of return. These
certificates would qualify as securities because they are instruments evidencing an
investment in a commercial enterprise. A banks certainly is a commercial enterprise.
Banks are licensed to receive investments from the public. When a bank makes an
offer of certain so called investment plans, they don’t have to undergo registration
with the SEC. But if it would issue its own share for subscription by the public, then
those shares shall have to undergo registration with the SEC.

Exempted secuties- ought to be registered w/ SEC, but instead of applying for registration, the
application could be for exemption, and if the application Is granted, they are called exempted
securities.

Ex. When the amount involve is not substantial, you could apply for exemption because of the cost of
registration.

Exempt Transactions- the law enumerates the exempt transactions:

1. Pre-incorporation Subscription Contracts (Logic:

2. stock dividends

3. increase its authorized capital stocks