SECURITIES AND EXCHANGE COMMISSION, PETITIONER, VS. HON. RODOLFO R. BONIFACIO, IN HIS CAPACITY AS THE PRESIDING JUDGE OF THE REGIONAL TRIAL COURT, BRANCH 159, PASIG CITY, PHILIPPINE ASSOCIATION OF SECURITIES BROKERS AND DEALERS, INC. (PASBDI), MA. VIVIAN YUCHENGCO, ISMAEL G. CRUZ, NESTOR S. AGUILA, AND MARITA A. LIMLINGAN, PHILIPPINE STOCK EXCHANGE (PSE) PSE’S 2009 NOMINATIONS AND ELECTIONS COMMITTEE (NOMELEC), RESPONDENTS.
FACTS
The Philippine Association of Securities Brokers and Dealers, Inc. (PASBDI) and several brokers, who own voting shares in the Philippine Stock Exchange (PSE), filed a petition for injunction before the Regional Trial Court (RTC). They sought to enjoin the implementation of Securities and Exchange Commission (SEC) Resolution No. 86, series of 2010, and the directives issued pursuant thereto. The Resolution granted exemptions from the voting rights limitation under Section 33.2(c) of the Securities Regulation Code (Republic Act No. 8799) to certain companies/industries but maintained that brokers are not exempt and are subject to the 20% limitation for an industry or business group. The SEC had issued directives to the PSE to implement this Resolution in its 2010 and 2011 Annual Stockholders’ Meetings, leading the PSE to issue corresponding NOMELEC Rules. The RTC and the Court of Appeals both affirmed the RTC’s jurisdiction over the petition and granted the injunction.
ISSUE
Whether SEC Resolution No. 86 and the directives issued pursuant thereto can be the subject of an appeal under Rule 43 to the Court of Appeals, instead of an action for injunction before the Regional Trial Court.
RULING
No. The assailed SEC Resolution and directives were issued pursuant to the SEC’s quasi-legislative or regulatory functions, not its quasi-judicial functions. The SEC exercised its regulatory power under Section 5 of the Securities Regulation Code to regulate the activities of the PSE and its shareholders to ensure compliance with the 20% voting rights limitation under Section 33.2(c). In resolving the PSE’s application for deferment or exemption, the SEC did not investigate facts, adjudicate private rights, or exercise discretion of a judicial nature characteristic of quasi-judicial functions. Since Rule 43 of the Rules of Court applies only to decisions of quasi-judicial agencies in the exercise of their quasi-judicial functions, the SEC issuances may not be appealed under this rule. Consequently, the Regional Trial Court has jurisdiction over the petition for injunction, as it constitutes a direct attack on the validity of the SEC’s quasi-legislative issuances.
