The Securities and Exchange Commission (SEC) is planning to formulate “less strict and easy to understand” foreign ownership rules, after the Supreme Court filed an Entry of Judgment pertaining to the definition of term “capital.”

“We do not want a rule that is difficult to implement,” SEC Chairman Teresita Herbosa said.

“We want to come up with rules that would lessen conflicts and controversies,” she said.

Herbosa also said that the reason why the agency has to come up with the guidelines fast is because the High Tribunal came up with an Entry of Judgment relevant to foreign ownership.

The entry of judgment of the High Court reads: “We partly grant the petition and rule that the term capital in Section 11, Article 12 of the 1987 Constitution refers only to shares of stock entitled to vote in the election of directors and thus the present case only to common shares, and not to the total outstanding capital stock [common and non-voting preferred shares].”

“Respondent Chairman of the SEC is directed to apply this definition of the term ‘capital’ in determining the extent of allowable foreign ownership in respondent Philippine Long Distance Telephone Co. [PLDT], and if there is a violation of Section 11, Article 12 of the Constitution, to impose the appropriate sanctions under the law,” the High Tribunal said.

Camilo Correa, SEC General Counsel, said that the Entry of Judgment made by the SEC is somewhat identical to what was made in Gamboa case.

“We are not pleasantly surprised, but still the Entry of Judgment reflects the dispositive portion of the original decision of Gamboa vs. Tebez case,” he said.

As for the comments on the foreign ownership rule, Correa said that the SEC received a lot of comments, but is still waiting for comments from concerned government agencies.

“We received a lot of comments already especially from the law offices, but other agencies that we are waiting for are National Economic Development Authority, Bangko Sentral ng Pilipinas, Department of Trade and Industry and the Board of Investment, because they have an interest in this proposed guideline defining capital,” he added.