Purpose  Investment contracts, certificates of interest or

participation in a profit sharing agreement,

A. Establish a socially conscious free market that certificates of deposit for future subscription
regulates itself  Fractional undivided interests in oil, gas, or
B. Encourage the widest participation of ownership other mineral rights
in the enterprises  Derivatives like options and warrants
C. Enhance the democratization of wealth Derivatives – are those whose value depends on the interest in or
D. Promote the development of the capital market performance of an underlying security but which does not require
any investment of principal in the underlying security
E. Protect investors Options – are contracts that give the buyer the right but not the
F. Ensure full and fair disclosure about securities obligation to buy or sell an underlying security at a predetermined
price which is called the exercise or strike price on or before the
G. Minimize, if not totally eliminate fraudulent or predetermined date which is called the expiry date which can
manipulative devices only be extended in accordance with the rules of the exchange
Warrants – are rights to subscribe or purchase new shares or even
existing shares in a company on or before predetermined called the
Overview expiry date and they have generally have a longer exercise period
than options
A. Most notable quality of the SRC: All securities  Certificates of assignments, certificates of
except exempted securities/transactions are participation, trust certificates, voting trust
required to be registered before they can be sold certificates or similar instruments
to the public  Proprietary or nonproprietary membership
B. Rejection and or revocation of registration of certificates in corporations
securities by the SEC.  Other instruments as may in the future be
C. Regulation of pre-mid plans which are contracts determined by the SEC (Catch all)
that provide for performance of future services
or the payment of future monetary consideration Example:
at the time of actual mean for which plan holders X wants to offer certificates of membership to a club
pay cash or installment at stated prices with or that he wants to build called “Paranaque Country Club”
without prices like life, education, pension and and through the funds raised by the sale of certificates of
other plans which the SEC may approve membership, that club will purchase land to be
D. Protection of shareholder interest through tender developed into a sports and health club.
offer
E. The prohibition on fraud, manipulation, and
insider trading
F. Regulation of securities market professional
G. Revocation, refusal or suspension of registration
of those brokers, dealers, salesmen and other
associated persons
H. Restrictions on over the counter markets
I. Self-regulation of associations of securities
brokers, dealers and other securities related
organization
J. Registration of clearing agencies
K. Limitation on margin trading or the amount of
credit that may be extended in any security
L. Civil liabilities arising from false statements in
the registration statement
M. Civil liabilities that may arise from false
statements or omissions in the prospectus other
communications or reports
N. Protection against manipulation of security
prices, manipulative and deceptive devices,
fraud in pre-need plans and commodities future
contracts, fraudulent transactions and insider
training
O. The establishment of trust funds to compensate
investors for extraordinary losses or damage
which they may suffer due to business failure or
fraud or mismanagement of the persons with
whom they may contract

Subject Matter:

Definition of Securities (Per Se)

Securities are SHARES, PARTICIPATION, OR

INTEREST in a corporation, commercial enterprise, or
profit making venture evidenced by a certificate,
contract, instrument, whether written or electronic in
character. The definition includes investment contracts.

They include: (Kinds of Security)

 Shares of stocks, bonds, debentures, notes
evidences of indebtedness, asset backed
securities