TARAN, CHRISTOPER S.

BSBA FM 2-2

Introduction to Investment Houses

Investment is where growth starts. Investments in people are the most significant

of all investments in the overall growth plan. His education and training have improved

his values and abilities, according to this. A different kind of investment, though, is

equally crucial. This is a reference to financial investment, which gives the economy its

vitality. Construction of factories and the financing of industrial, commercial, and

agricultural operations both require money. Obviously, increased employment, output,

money, and consumption result from all of these economic activities. And they

significantly contribute to enhancing the people's social and economic circumstances.

The capital required for production or business is provided by investment firms and

securities brokers/dealers. They increase capital formation, which is then used to fund

various types of investments in the economy, by selling assets like bonds and stocks.

As a result, these financial institutions function as engines of economic growth. They

serve as an intermediary between individuals with the means to invest and those with

the know-how to turn those resources into successful endeavors.

The Establishment of the Investment Houses (PD No. 129)

Any business regarded to be a "Investment House" and subject to the rules of

this Decree and other applicable legislation is one that underwrites the securities of
other firms. The act or practice of ensuring the distribution and sale of securities of any

kind issued by another corporation is known as underwriting. "Securities" are written

documentation of ownership, interest, or participation in a business as well as written

documentation of debt owed by an individual or business. It includes, without limitation,

the items listed in Section 2 of the Securities Act (Commonwealth Act No. 83, as

amended). Any investment house must have Filipino people control the majority of the

voting stock. The citizenship of each stockholder and, in the case of corporate owners

of voting stock, the citizenship of the individual owners of voting stock in the corporation

holding shares in that Investment House, shall serve as the basis for the computation of

the percentage of foreign ownership of voting stocks in Investment Houses. The

majority of the Board's members must be Filipino nationals.

Republic Act No. 8366 “The Investment Houses Law”

To ensure long-term economic growth and development, the State has made it a

priority to increase and fortify the capital basis of the economy. In order for investment

houses to be able to meet both the present and future demands of the market, the

Philippine investment house business is hereby liberalized, boosting foreign equity

involvement and raising the minimum capitalization requirement of investment houses.

Citizens of the Philippines must own at least forty percent (40%) of any Investment

House's voting stock. The citizenship of each stockholder and, if the stockholder is a

corporation, the citizenship of the individual stockholders holding voting shares in that

corporation shall serve as the basis for the measurement of the proportion of foreign

ownership of voting stocks in Investment Houses. The Securities and Exchange

Commission may only approve foreign equity applications for investment houses if

Philippine citizens in the applicant's country have the same or similar rights.

Philippine Association Of Securities Brokers and Dealers Inc.

The Securities and Exchange Commission (SEC) registered the non-stock, non-

profit Philippine Association of Securities Brokers and Dealers, Inc. (PASBDI) on

December 12, 1974 with the aim of institutionalizing a medium through which its

members can collectively support and coordinate with the national government, its

appropriate agencies, and its instrumentalities in the development of the securities

market in the Philippines. Section 39 of the Securities Regulation Code as well as the

Implementing Rules and Regulations specify its duties and obligations. 132 Member

Firms and Trading Participants of the Philippine Stock Exchange are currently active

members of PASBDI. A Government Securities Eligible Dealer (GSEDS) is a securities

dealer with a Securities and Exchange Commission (SEC) license who works in a

service sector that is overseen or regulated by the government (Securities and

Exchange Commission, Bangko Sentral ng Pilipinas, or Insurance Commission), and

who possesses the following criteria: (a) P100 million in unimpaired capital and surplus

account; (b) the statutory ratios required for the sector.

Republic Act No. 8799/ Exempt Securities and Exempt Transactions

If a person is not registered with the Commission as a broker or dealer, they are

not permitted to buy or sell securities in the Philippines, serve as a salesperson, or be

affiliated with a broker or dealer. In the case of an application submitted in accordance

with this Section, the Commission shall allow registration if it determines that the
applicant has complied with the requirements of this Code and its rules and regulations,

and shall refuse registration if it does not reach this determination. A clearing agency

may withdraw its registration, halt its operation, or resume it upon proper application in

accordance with the Commission's rules and regulations and under such conditions as

the Commission may judge essential for the protection of investors.