Reorganization 

The SRC authorized the Commission to provide for its reorganization, to streamline its structure and operations, upgrade its human resource component, and enable it to more efficiently and effectively perform its functions and exercise its powers under the SRC, Presidential Decree No. 902-A, the Corporation Code, the Investment Houses Law, the Financing Company Act and other existing laws.

The Commission, as a collegial body aided by experts, studied the basic core functions and the organizational structures of the government regulatory bodies in other countries, which are widely looked up to as credible, effective and responsible for the development of mature capital markets.

More importantly, the Commission kept constant consultation with the Civil Service Commission to ensure a conflict-free reorganization process.

The Commission, likewise, worked closely with the Department of Budget and Management to speed up the release of the separation package, the appropriation for which was provided by the SRC, and which was an indispensable factor for turning the SEC reorganization into a success model for Government.

The process was greatly helped by the communication between  the Commission and all the employees.

The Commission identified four (4) core functions namely:  capital markets, company registration, enforcement, and support services, which  fundamentally enable the SEC to accomplish the policy objectives set by the SRC.  Thus, the new organizational structure consists of the Commission, headed by the Chairman, assisted by two Special Offices - that of the General Counsel and the General Accountant; the 8 Departments which are the operations units distributed among the four (4) core functions; and the seven (7) extension offices.

The table below shows the changes in the number of personnel and organizational units after the reorganization.

Table 1

The following table shows the extent of the changes in operational units.

Table 2

Reorganization : The Special Offices 

The Commission created two special offices to enable the body to perform expanded and specialized functions requiring expertise in law and in accounting principles and practices.  These are the offices of the General Counsel and of the General Accountant.

The Commission Secretary’s office is retained under the administrative supervision of the General Counsel.

A Review Unit, comprised of lawyers, was created, also under the supervision of the General Counsel.  To ensure that due process is observed by the Commission in arriving at decisions on cases, which the SRC expressly specifies as requiring notice and hearing, the Review Unit is authorized by the Commission to hear such cases prior to the disposition by the Commission.

This Unit is distinguished from the Complaints and Investigation Division (CID), within the Compliance and Enforcement Department (CED).  The CID observes summary procedures in the conduct of investigations, the results of which may progress (with prior approval by the Commission) to the Department of Justice, for the preliminary investigation of criminal violations of the SRC; or to the Review Unit, for cases that are specified, under the SRC, as requiring notice and hearing prior to resolution of the Commission.

The Office of the General Accountant (OGA) was created to provide the Commission with expertise in interpreting internationally accepted accounting principles, to assist the Commission in ensuring that internationally accepted accounting standards are observed, and to provide technical support to the SEC operational departments relative to the accounting treatment for public offerings and disclosure issues.

Reorganization : The Four Core Functions 

 The eight (8) SEC operational departments have been distributed, in a streamlined fashion, to execute the four (4) core functions, defined as follows:

·        Capital Market Development and Regulation

The regulation and licensing of traditional and non-traditional securities as well as the key elements and players in the capital markets, such as exchanges, brokers, dealers, traders and others.

·        Company Registration and Monitoring

The registration of foreign and local companies and partnerships and the monitoring of the compliance of registered entities with provisions under the Corporation Code, Partnership Act, Foreign Investments Act, and other complementary laws.

·        Enforcement

The protection of investors, through the timely and speedy enforcement of compliance by all market participants of all pertinent governing laws, rules, regulations and policies administered by the Commission.

·        Support Services

The support of the operations of the SEC by providing the indispensable services for human resource development and administration, economic research and information and financial management.

A New Structure Poised and Primed for Effective Corporate Governance

As the Commission succeeded in the conflict-free separation of about one half of its employees last December 1, 2000, it was able to evaluate the core competencies of the employees, who were retained, and to appropriately select and place them in the new positions of the reorganized structure.

Further, the Commission started and nearly completed the search for eminently qualified candidates for key positions, who meet the more rigorous requirements of the new Qualifications Standards.

Training programs (over the short and long terms), to support and enhance the core competencies of the reorganized human resource were started through training modules conducted last year by reputable foreign and local experts.

In working towards acquiring an essential component of the reorganized structure, i.e., use of information technology, an updated inventory and capability assessment of SEC’s existing computer system was completed.

The new SEC Organizational Chart follows.

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