SEC Memorandum Circular No. 11 (2025): Updated Guidelines on Exempt Transactions in the Philippines

On September 9, 2025, the Securities and Exchange Commission (SEC) issued Memorandum Circular No. 11, Series of 2025, introducing further guidelines on exempt transactions under Section 10.1 of the Securities Regulation Code (SRC).

These changes amend the 2015 Implementing Rules and Regulations (IRR) and bring stricter compliance standards for corporations, issuers, and investors.

What Are Exempt Transactions?

Exempt transactions are securities dealings that do not require SEC registration due to their limited scope and reduced public risk. Examples include:

• Private placements to a limited number of investors

• Issuances to qualified buyers

• Certain debt instruments to institutional lenders

While these transactions skip full registration, they are not exempt from disclosure and compliance requirements under the updated SEC rules.

Key Highlights of SEC MC No. 11 (2025)

Optional Confirmation of Exempt Transactions

Issuers can now file SEC Form 10.1 for an optional confirmation that their transaction qualifies as exempt. This offers legal certainty and reduces compliance risks.

Limits on Private Placements

• Offers must not exceed 19 buyers.

• General solicitation and advertising remain strictly prohibited.

Clarified Standards for Qualified Buyers

Qualified buyers now include:

• Banks, insurance companies, and pension funds

• Investment houses

• High-net-worth individuals and corporations meeting asset and income thresholds

Registrations as a qualified buyer are valid for 3 years, subject to SEC inspection.

Exemptions for Debt Instruments

Debt issued to primary institutional lenders may qualify as exempt, provided issuers comply with reporting and disclosure rules.

Updated Requirements for Limited Public Offerings

Stricter requirements include:

• Board and stockholder approvals

• Audited financial statements (AFS)

• General Information Sheet (GIS)

• Corporate Secretary certificates

• Proof of filing fee payments

Compliance Checklist for Issuers

When applying for exemption, issuers must prepare:

• SEC Form 10.1 (Application for Exempt Transaction Confirmation)

• Disclosure statements to investors

• Audited financial statements

• Updated Articles of Incorporation & GIS

• Certificates from Corporate Secretary and HR Head (for stock option plans)

• Payment proof of filing fees

Why Businesses Should Pay Attention

For Corporations

• Compliance Assurance: Optional confirmation avoids later SEC disputes.

• More Documentation: Stricter filings add responsibility for CFOs, compliance officers, and legal counsel.

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For Investors

• Investor Protection: Expanded disclosure means better transparency.

• Qualified Buyer Screening: Only financially capable investors can join exempt transactions.

How Our CPA–Law Firm Can Help

Navigating SEC compliance requires financial and legal expertise. Our team can help you with:

• Evaluating if your transaction qualifies for exemption

• Preparing and filing SEC Form 10.1 and supporting documents

• Advising on qualified buyer requirements

• Ensuring full compliance with updated SEC rules

Final Thoughts

The SEC Memorandum Circular No. 11 (2025) reflects the Commission’s goal of balancing capital market development with investor protection.

For companies, compliance is no longer optional — it’s essential. For investors, the updates ensure greater safeguards.

Need legal and accounting guidance on SEC exemptions?

Contact our firm today for a consultation and let us help you structure your transaction in compliance with the SRC.