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Powers and functions of the SEC

Pursuant to the Securities Regulation Code, P.D. 902-A, the Corporation Code, the Investment
House Law, the Financing Company Act and other existing laws, the SEC shal have the following powers
and functions:

a) Have jurisdiction and supervision over all corporations, partnerships, associations who are
grantees of primary franchises and/ or a license or permit issued by the government;
b) Formulate policies and recommendations on issues concerning the securities market, advise
congress and government agencies, on all aspects of the securities market and propose
legislation and amendment thereto;
c) Approve, reject, suspend, revoke or require amendments to the registration statements, and
registration and licensing applications;
d) Regulate, investigate or supervise the activities of persons to ensure compliance;
e) Supervise, monitor, suspend or take over the activities of exchanges, clearing agencies and other
self-regulating organizations;
f) Impose sanctions for the violation of the laws and the rules, regulations and orders issued
pursuant thereto;
g) Prepare, approve, amend or repeal rules, regulations and orders, and issue opinions and provide
guidance on and supervise compliance with such rules, regulations and orders;
h) Enlist the aid and support of and/ or deputize any and all enforcement agencies of the
government, civil or military as well as any private institution, corporation, firm, association or
person in the implementation of its powers and functions;
i) Issue cease and desist orders to prevent fraud or injury to the investing public;
j) Punish for contempt of the Commission, both direct and indirect, in accordance with the
pertinent provisions of and penalties prescribed by the Rules of Court;
k) Compel the officers of any registered corporation or association to call meetings of stockholders
or members thereof under it supervision;
l) 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, and books of accounts of any entity or person
under investigation as may be necessary for the proper disposition of the cases before it, subject
to the provision of existing laws;
m) Suspend, or revoke, after proper notice and hearing the franchise or certificate of registration of
corporations, partnerships or associations, upon any grounds provided by law;
n) Exercise such 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 the
Commission to achieve the objectives and purposes of these laws.

(Reviewer on Commercial Law, Sundiang & Aquino, 2013 p277-279)

communications and reports (SRC. or who shall commit any acts calculated to produce said result. dealers and salesmen. 57). 24. Sec. misleads prospective purchasers into buying his merchandise under the impression that they are buying that of his competitors. k) Limitations on margin trading or amount of credit that may be extended on any security (SRC. manipulative and deceptive devices. 16). i) Self-regulation of associations of securities brokers. 49). the Supreme Court discussed that the essential elements of an action for unfair competition are (1) confusing similarity in . 56). businesses or services of one and for the goods. e) Prohibition on fraud.R. whether or not registered mark is employed (Intellectual Property Code. fraud in pre-need plans and commodities future contracts. or his business services. 26 & 27). businesses or services of another. 19-20). Secs. Sec. l) Civil liabilities arising from false statement in the registration statement (SRC. dealers and other securities related organizations (SRC. refusal or suspension of registration of brokers. n) Protection against manipulation of security prices. Sec. Sec. 29). and associated persons (SRC. Secs. 143993. Big mak Burger (G.c. g) Revocation. 13).2). d) Protection of shareholders interests via rules on tender offers and proxy solicitations (SRC. or his business or services for those of another person who has established good will in the goods such person manufactures or deals in. h) Restriction of over-the-counter markets (SRC. 42). 58. 28). Sec. 168. Sec. 25. 60 & 61). Sec. m) Civil liabilities arising from false statements or omissions in the prospectus. Unfair Competition Unfair Competition is the employment by a person of deception or any other means contrary to good faith by which he passes of the goods manufactured by him or in which he deals. manipulation and insider trading (SRC.Features Intended to Protect the Investing Public a) All securities are required to be registered before they can be sold to the public (SRC. Sec. o) Establishment of trust funds to compensate investors for extraordinary losses or damage they may suffer due to business failure or fraud or mismanagement of the presons with whom they transact (SRC. No. b) Rejection and revocation of the registration of securities (SRC. August 18. Sec. Sec. 2004). 29). c) Regulation of pre-need plans (SRC. 36 5(a)). L. It is the act of passing off or attempting to pass off upon the public the goods. Sec. 8). Sec. by imitative devise on the general appearance of the goods. j) Registration of clearing agencies (SRC. 59. Passing off takes place where a person. 32). In Mcdonalds Corporation v. Secs. Sec. f) Regulations of Securities Market Professionals (SRC. fraudulent transactions and insider trading (SRC.

with the first word of both marks having the same letters and the second word having the same first two letters. Inc. CA held otherwise.” Respondents’ goods are hamburgers which are also the goods of petitioners. the hold that as found by the RTC. Aurally.C. the two marks will likely result in confusion in the public mind. respondents have adopted in “Big Mak” not only the dominant but also almost all the features of “Big Mac.” Applied to the same food product of hamburgers. but may result from other external factors in the packaging or presentation of the goods. This clearly shows respondents’ intent to deceive the public. Clearly. one would not know whether the “Mac” or “Mak” ends with a “c” or a “k. “Big Mac” and “Big Mak” for hamburgers create even greater confusion. There can be trademark infringement without unfair competition as when the infringer discloses on the labels containing the mark that he manufactures the goods. Petitioner filed a complaint for trademark infringement and unfair competition.. even the last letters of both marks are the same. but also actual or probable deception on the public because of the general appearance of the goods.the general appearance of the goods. an American corporation operating a global chain of fast-food restaurants. Big Mak Burger. Trademark infringement is a form of unfair competition. The Court finds that respondents’ use of the “Big Mak” mark results in likelihood of confusion. Hence. not only aurally but also visually. The trial court found for petitioners. When one hears a “Big Mac” or “Big Mak” hamburger advertisement over the radio. considering the Filipino language. respondent corporation is liable for unfair competition. . The confusing similarity may or may not result from similarity in the marks. Visually.” and not those of petitioners who have the exclusive right to the “Big Mac” mark. is the owner of the ‘Big Mac’ mark for its double-decker hamburger sandwich here and in the US. There is actually no notice to the public that the “Big Mak” hamburgers are products of “L. In spelling. and (2) intent to deceive the public and defraud a competitor. a domestic corporation which operates fast-food outlets and snack vans applied for the registration of the ‘Big Mak’ mark for its hamburger sandwiches. The intent to deceive and defraud may be inferred from the similarity of the appearance of the goods as offered for sale to the public. Trademark infringement constitutes unfair competition when there is not merely likelihood of confusion. just like petitioner’s use of the “Big Mac” mark on hamburgers. Meanwhile. the two marks have both two words and six letters. Here. a person cannot distinguish “Big Mac” from “Big Mak” by their sound. thus preventing the public from being deceived that the goods originate from the trademark owner. Since respondents chose to apply the “Big Mak” mark on hamburgers. Unfair competition is broader than trademark infringement and includes passing off goods with or without trademark infringement.C. and the second word of both marks also phonetically the same. Respondents denied there is colorable imitation and argued that petitioner cannot exclusively appropriate the mark ‘Big Mac’ because the word ‘Big’ is a generic and descriptive term. petitioner McDonald’s. Petitioner opposed on the ground that ‘Big Mak’ was a colorable imitation of its registered ‘Big Mac’ mark for the same food products. the two marks are the same. Certainly. respondent L. Indeed. Actual fraudulent intent need not be shown. respondents have obviously clothed their goods with the general appearance of petitioners’ goods. with the first word of both marks phonetically the same.