Midterm Pointers Flashcards
1
Q
These are shares, participation or interests in a corporation or in a commercial enterprise or profit-making venture and evidenced by a certificate, contract, instruments, whether written or electronic in character.
A
Securities
2
Q
What is the main feature of a security?
This feature makes them attractive and desirable and necessitates the protection of the investing public.j
A
A person purchases or acquires the same in the expectation of obtaining passive income or asset appreciation, that is income or gain obtained through the effort of another person.
3
Q
Securities include…
(7)
A
- Shares of stocks, bonds, debentures, notes evidences of indebtedness, asset-backed securities.
- Investment contracts, certificates of interest or participation in a profit sharing agreeemnt, certificates of deposit for a future subscription;
- Fractional undivided interests in oil, gas, or other mineral rights;
- Derivatives like option and warrants;
- Certificates of assignments, certificates of participation, trust certificates, voting trust certificates or similar instruments
- Proprietary or nonproprietary membership certificates in corporations; and
- Other instruments as may in the future be determined by the Commission.
4
Q
It provides that securities shall not be sold or offered for sale or distribution within the Philippines, without a registration statement duly filed with and approved by the SEC (Commission).
A
Securities Regulations Code (SRC)
5
Q
Power of the Commission
Securities and Exchange Commission
A
The Commission may audit the financial statements, assets, and other information of firm applying for registration of its securities whenever it deems the same necessary to insure full disclosure or to protect the interest of the investors and the public in general.
6
Q
Payment of the filing fees
A
Shall not exceed 1/10 of 1% of the aggregate price at which such securities are proposed to be offered.
7
Q
Securities EXEMPT from Registration
(GGRIB)
A
- Any security issued or guaranteed by the Government of the Philippines
- Any security issued or guaranteed by the government of any country with which the Philippines maintains diplomatic relations, or by any state, province or political subdivision thereof on the basis of reciprocity: Provided, that the SEC may require compliance with the form and content for disclosures the SEC may prescribe.
- Certificates issued by a receiver or by a trustee in bankruptcy duly approved by the proper adjudicatory body.
- Any security or its derivatives the sale or transfer of which, by law, is under the supervision and regulation of the Office of the Insurance Commission, Housing and Land Use Rule Regulatory Board, or the Bureau of Internal Revenue
- Any security issued by a bank except its own shares of stock.
8
Q
Reportorial Requirements
A
- Annual report composed of a Balance Sheet, Profit and Loss Statement, and a Statement of Cash Flows certified by a CPA and a management discussion and analysis of results of operation.
- Other periodical reports for interim fiscal periods and current reports on significant developments of the issuer as the SEC may prescribe as necessary to keep current information on the operation of the business and financial condition of the issuer.
9
Q
The reportorial requirements shall apply to an issuer:
A
- Which has sold a class of its securities pursuant to a registration
- With a class of securities listed for trading in an Exchange
- With assets of at least Fifty million pesos or such other amount as the SEC shall prescribe, and having** two hundred (200)** or more holders each holding at least one hundrer (100) share of a class of its equity securities:
9
Q
When shall the obligation of the issuer to file to report be terminated?
A
the obligation of such issuer to file report shall be terminated ninety (90) days after notification to the SEC by the issuer that the number of its holders holding at least one hundred (100) share reduced to less than one hundred (100)
10
Q
It is committed whenever an insider, in possession of a material non-public information, transacts on the securities.
A
Insider Trading
11
Q
Who is considered an Insider?
A
- The issuer
- A director or officer or a person controlling the issuer
- A person whose relationship or former relationship to the issuer gives or gave him access to material non-public information
- A government employee, or director, or officer of an exchange, clearing agency, and/or self-regulatory organization who has access to material non-public information.
- A person who learns such information by a communication from any of the foregoing insiders.
12
Q
Exceptions to Insider Trading
A
A person in possession of material non-public information can buy or sell securities:
1. When he can prove that the information was not gained from an insider;
2. If the other party is identified and that he:
a. Disclosed the information; or
b. Had reason to believe that the other party is also in possession of the information
13
Q
Fraudulent Transactions and Other Market Manipulations
(11)
A
- Wash Sale
- Matched Order
- Marking the close
- Painting the tape
- Squeezing the float
- Hype and dump
- Boiler Room Operations
- Circulating or Disseminating Information on Share Price Movement
- Making False or Misleading Statements
- Pegging or Fixing or Stabilizing the price of security
- Short sale
14
Q
It refers to a person or organization who controls the collection, holding, processing or use of personal information, including a person or organization who instructs another person or organization to collect, hold, process, use, transfer, or disclose personal information on his or her behalf.
A
Personal information controller
15
Q
Personal information controller excludes:
A
- A person or organization who performs such functions as instructed by another person or organization; and
- An individual who collects, holds, processes or uses personal information in connection with the individual’s personal, family or household affairs.
16
Q
Data Privacy Act Scope of Application
Applicability
A
- The processing of all types of personal information and
- to any natural and juridical person involved in personal information processing including those personal information controllers and processors who, although not found or established in the Philippines, use equipment that are located in the Philippines, or those who maintain an office, branch or agency in the Philippines subject to the immediately succeeding paragraph.
17
Q
Data Privacy Act does not apply to:
(7)
A
- Information about any individual who is or was an officer or employee of a government institution that relates to the position or functions of the individual, including:
* a. The fact that the individual is or was an officer or employee of the government institution;
* b. The title, business address and office telephone number of the individual
* c. The classification, salary range and responsibilities of the position held by the individual; and
* d. The name of the individual on a document prepared by the individual in the course of employment with the government; - Information about an individual who is or was performing service under contract for a government institution that relates to the services performed, including the terms of the contract, and the name of the individual given in the course of the performance of those services;
- Information relating to any discretionary benefit of a financial nature such as the granting of a license or permit given by the government to an individual, including the name of the individual and the exact nature of the benefit;
- Personal information processed for journalistic, artistic, literary or research purposes;
- Information necessary in order to carry out the functions of public authority which includes the processing of personal data for the performance by the independent, central monetary authority and law enforecement and regulatory agencies of their constitutionally and statutorily mandated functions.
- Information necessary for banks and other financial institutions under the jurisdiction of the independent, central monetary authority or Bangko Sentral ng Pilipinas to comply with the CISA and Republic Act No. 9160, as amended, otherwise known as the Anti-Money Laundering Act and other applicable laws; and
- Personal information originally collected from residents of foreign jurisdictions in accordance with the laws of those foreign jurisdictions, including any applicable data privacy laws, which is being processed in the Philippines.
18
Q
Sensitive Personal Information
A
- About an individual’s race, ethnic origin, marital status, age, color, and religious, philosophical or political affiliations;
- About an individual’s health, education, genetic or sexual life of a person, or to any proceeding for any proceeding for any offense committed or alleged to have been committed by such person, the disposal of such proceedings, or the sentence of any court such proceedings;
- Issued by government agencies peculiar to an individual which includes, but not limited to, social security numbers, previous or current health records, licenses or its denials, suspension or revocation, and tax returns; and
- Specifically established by an executive order or an act of Congress to be kep classified
19
Q
Rights of the Data Subject
(8)
A
- Right to Informed Consent
- Right to Object
- Right to Withhold Consent
- Right to Access
- Right to Correction
- Right to Erasure
- Right to Damages
- Right to Data Portability
20
Q
Transmissibility of Rights of the Data Subject
A
The lawful heirs and assigns of the data subject may invoke the rights of the data subject for which he or she is an heir or assignee at any time after the death of the data subject or when the data subject is incapacitated or incapable of exercising the rights as enumerated.
21
Q
Non-applicability of Rights
Data Privacy
A
- If the processes personal information are used only for the needs of scientific and statistical research and, on the basis of such, no activities are carried out and no decisions are taken regarding the data subject: Provided, that the personal inforamtion shall be held under strict confidentiality and shall be used only for the declared purpose; and
- To processing of personal information gathered for the purpose of investifation in relation to any criminal, administrative or tax liabilities of a data subject.
22
Q
Unauthorized Processing
Unlawful acts and penalties
A
Any person who process personal information without the consent of the data subject, or without being authorized under the Data Privacy Act or any existing law.
Penalties:
* Personal information - 1 to 3 years Imprisonment - Fine P500,000 to 2,000,000
* Sensitive Personal Information - 3 to 6 years Imprisonment - Fine P500,000 to P4,000,000
23
Q
Access
Unlawful Act and Penalties
A
Any person who, due to negligence, provided access to personal information without being authorized under the Data Privacy Act or any existing law.
Penalties:
* Personal information - 1 to 3 years Imprisonment - Fine P500,000 to 2,000,000
* Sensitive Personal Information - 3 to 6 years Imprisonment - Fine P500,000 to P4,000,000
24
Unauthorized Disclosure
| Unlawful Act and Penalties
Any personal information controller or personal information processor or any of its officials, employees or agents, who discloses to a third party personal or sensitive personal information, not covered by malicious disclosure above, without the consent of the data subject.
**The Penalties**
* Personal information - 1 to 3 years Imprisonment - Fine P500,000 to 1,000,000
* Sensitive Personal Information - 3 to 5 years Imprisonment - Fine P500,000 to P2,000,000
25
Concealment of Security Breaches Involving Sensitive Personal Information
| Unlawful Acts and Penalties
Any person who, after having knowledge of a security breach and of the obligation to notify the Commission, **intentionally or by omission conceals the fact of such security breach**. The penalty shall be imprisonment of **1 year and 6 months to 5 years and a fine of P500,000 to P1,000,000**.
26
Extent of Liability
| Unlawful Act and Penalties
1. Juridical Persons - imposed upon **responsible officers**. If the offender is a juridical person, the court may suspend or revoke any of its rights under the Data Privacy Act.
2. Alien - **deported** without further proceedings
3. Large-Scale - **Maximum penalty** shall be imposed when the personal information of **at least 100 persons is harmed**, affected or involved as the result of the mentioned sanctions.
4. Public Official or Employee - In addition to the penalties prescribed, shall suffer **perpetual or temporary absolute disqualification from office**
5. Offense Committed by Public Officer - Accessory penalty consisting in the **disqualification to occupy public office** for a term **double the term of criminal penalty**
6. Restitution - governed by the provisions of the new civil code.
27
It is a grant issued by the government to an inventor, designer or maker, the right to exclude others from making, using or selling his invention, design or utility model within the country for a specific term, in exchange of his patentable disclosure.
Patent
28
Subject matter of right: New, useful and industrially applicable inventions
Where right is to be registered: IPO
Protection starts: Application
Duration of right: 20 years
PATENT
29
Grounds for Cancellation of Patent
| (3)
1. Invention is not new (no novelty)
2. The patent did not disclose the invention in a manner sufficiently clear and complete for it to be carried out by any person skilled in the art.
3. Contrary to public order or morality.
30
Patent Rights: A patent shall confer on its owner the following exclusive rights:
| (4)
1. Where the subject matter of a patent is a **product**, to **restrain, prohibit and prevent any unauthorized** person or entity from **making, using, offering for sale, selling or importing that product.**
2. Where the subject matter of a patent is a **process**, to **restrain, prevent or prohibit any unauthorized** person or entity from **using the process**, and from manufacturing, dealing in, using selling or offering for sale, or importing any product obtained directly or indirectly from such process.
3. The **right to assign**, or **transfer by succession** the patent, and
4. **Right to conclude licensing contracts** for the same.
31
What is Doctrine of Equivalents?
| Kinds of Infringement
With some modification and change, but SUBSTANTIALLY THE SAME:
a. Function
b. Way/Means/Principle or Mode of Operation
c. Result
32
It provides that an infringement also takes place when **a device appropriates a prior invention** by incorporating its innovative concept and, although with some modification and change, **performs substantially the same function in substantially the same way to achieve substantially the same result**. Identity of result does not amount to infringement of patent unless the invention being questioned operates in substantially the same way or by substantially the same means as the patented one, even though it performs the same function and achieves the same result. In other words, the principle or mode of operation must be the same or substantially the same.
## Footnote
It requires the satisfaction of the function-means-and-result test, the patentee having the burden to show that all three components of such equivalency test are met.
Doctrine of Equivalents
33
It is the issuance of a license by the Director General of the IPO to exploit a patented invention without the permission of the patent holder, either by manufacture or through parallel importation.
Compulsory Licensing
34
What are the grounds for compulsory licensing?
| (6)
1. National emergency/circumstances of extreme urgency
2. Public interest so requires
3. The use of the patent is anti-competitive
4. Public non-commerical use without satisfactory reasons
5. Invention is not being worked in the PH on a commercial scale without satisfactory reasons (importation counts as working or using)
6. Demand for patented drugs and medicine is not being met to an adequate extent and/or reasonable terms, as determined by DOH.
35
It means any visible sign capable of distinguishing the goods (trademark) or service (service mark) of an enterprise and shall include a stamped or marked container of goods.
## Footnote
Acquired through registration
Mark
36
Rights of an owner of a well-known mark: (Theory of Dilution)
The exclusive right of the owner of a well-known mark which is registered in the Philippines, shall extend to goods and services which are not similar to those in respect of which the mark is registered.
37
Requisites for Rights of an owner of a well-known mark (theory of dilution)
| (2)
1. That use of that mark in relation to those goods or services would **indicate a connection** between those goods or services and the owner of the registered mark; and
2. That the **interest of the owner** of the registered mark are **likely to be damaged** by such use.
38
What are considered Original Works?
Literary and artistic works, hereinafter referred to as "works," are original intellectual creations in the literary and artistic domain protected from the moment of their creation and shall include in particular:
1. Books, pamphlets, articles and other writings;
2. Periodicals and newspapers;
3. Lectures, sermons, addresses, dissertations prepared for oral delivery, whether or not reduced in writing or other material form;
4. Letters;
5. Dramatic or dramatico-musical compositions; choreographic works or entertainment in dumb shows;
6. Musical compositions, with or without words;
7. Works of drawing, painting, architecture, sculpture, engraving, lithography, or other works of art, models or designs for works of art;
8. Original ornamental designs or models for articles of manufacture, whether or not registrable as an industrial design, and other works of applied art.
9. Illustrations, maps, plans, sketches, charts and three-dimensional works relative to geography, topography, architecture or science;
10. Drawings or plastic works of a scientific or technical character;
11. Photographic works including works produced by a process analogous to photography; lantern slides;
12. Audiovisual works and cinematrographic works and works produced by a process analogous to cinematography or any process for making audio-visual recordings;
13. Pictorial illustrations and advertisements
14. Computer programs; and
15. Other literary, scholarly, scientific and artistic works.
39
What are the objectives of the E-Commerce Act?
| (3)
1. to **facilitate domestic and international dealings, transactions, arrangements, agreements, contracts and exchanges and storage of information** through the utilization of electronic, optical and similar medium, model, instrumentality and technology.
2. to **recognize the authenticity and reliability** of **electronic data messages** or **electronic documents** related to such activities and
3. to **promote the universal use of electronic transactions** in the government and by the general public.
40
Who is the originator?
It refers to a **person by whom, or on whose behalf**, the electronic document **purports to have been created, generated and/or sent**. The term **does not include** a person acting as an **intermediary** with respect to that electronic document.
41
It refers to any **distinctive mark**, characterstic and/or sound in electronic form, **representing the identity of a person** and attached to or **logically associated with the electronic data message** or electronic document or any methodology or procedures employed or adopted by a person and executed or adopted by such person with the **intention of authenticating or approving an electronic data message or electronic document**.
Electronic Signature
42
It refers to a **secret code** which **secures and defends sensitive information** that crossover public channels into a form decipherable only with a matching electronic key.
Electronic Key
43
Legal Recognition of Electronic Data Messages
Information **shall not be denied validity** or enforceability solely **on the ground that it is in the form of electronic data** message purporting to give rise to such legal effect, or that it is merely incorporated by reference in that electronic data message.
44
Legal Recognition of Electronic documents
Electronic documents shall have **legal effect, validity or enforceability** as any other document or legal writing, and:
a. Where the **law requires a document to be in writing**, that requirement is met by an electronic document if the said electronic document:
* i. maintains its **integrity and reliability** and
* ii. **can be authenticated** so as to be usable for subsequent reference, in that:
1. The electronic document has **remained complete and unaltered**, apart from the addition of any endorsement and any authorized change, or any change which arises in the normal course of communication, storage and display; and
2. The electronic document is **reliable** in the light of the **purpose** for which it was generated and in the light of all relevant circumstances.
b. Paragraph (a) applies whether the requirement therein is in the **from of an obligation** or whether the **law simply
provides consequences for the document not being presented or retained** in its original from.
c. Where the law requires that a document be **presented or retained in its original form**, that requirement is met by an electronic document if-
i. There exists a **reliable assurance** as to the **integrity** of the document from the time **when it was first generated in its final from**; and
ii. That document is **capable of being displayed** to the person to whom it is to be presented: Provided, That no provision of the Act shall apply to vary any and all requirements of existing laws on formalities required in the execution of documents for their validity.
## Footnote
For evidentiary purposes, an **electronic document** shall be the **functional equivalent of a written document** under existing laws.
The Act does not modify any statutory any statutory rule relating to admissibility of electronic data massages or electronic documents, except the rules relating to authentication and best evidence.
45
Electronic Signature
An **electronic signature** on the electronic document shall be **equivalent to the signature of a person** on a WRITTEN DOCUMENT if:
a. the signature is an **electronic signature** and
b. **proved** by showing that a **prescribed procedure**, not alterable by the parties interested in the electronic document, **existed** under which-
i. A **method** is used **to identify the party** sought to be bound and to indicate said party's access to the electronic document necessary for his consent or approval through the electronic signature;
ii. Said method is **reliable and appropriate for the purpose** for which the electronic document was generated or
communicated, in the light of all circumstances, including any relevant agreement;
iii. It is **necessary for the party sought to be bound**, in order to proceed further with the transaction to have executed or provided the electronic signature; and
iv. The **other party is authorized and enable to verify the electronic signature** and to **make the decision to proceed** with the transaction authenticated by the same.
46
Presumption Relating to Electronic Signatures
In any proceedings involving an electronic signature, it shall be presumed that,
a. The electronic signature is the **signature of the person to whom it correlates**; and
b. The electronic signature was **affixed by that person** with the **intention of signing or approving** the electronic document **unless**
i. the **person relying** on the electronically designed electronic document **knows or has notice of defects** in/or **unreliability** of the signature or
ii. **reliance** on the electronic signature is **not reasonable under the circumstances**.
47
Actions Related to Contracts of Carriage of Goods
It applies to any action in connection with, or in pursuance of, a contract of carriage of goods, including but not limited to:
a. (i) furnishing the marks, number, quantity or weight of goods;
(ii) stating or declaring the nature or value of goods;
(iii) issuing a receipt for goods;
(iv) confirming that goods have been loaded;
b. (i) notifying a person of terms and conditions of the contract;
(ii) giving instructions to a carrier;
c. (i) claiming delivery of goods;
(ii) authorizing release of goods;
(iii) giving notice of loss of, or damage to goods;
d. giving any other notice or statement in connection with the performance of the contract;
e. undertaking to deliver goods to a named person or a person authorized to claim delivery;
f. granting, acquiring, renouncing, surrendering, transferring or negotiating rights in goods;
g. acquiring or transferring rights and obligations under the contract.
48
Government Use of Electronic Data Messages, Electronic Documents and Electronic Signature
a. accept the creation, filing or retention of such documents in the form of electronic data messages or electronic documents;
b. issue permits, licenses, or approval in the form of electronic data messages or electronic documents;
c. require and/or accept payments, and issue receipt acknowledging such payments, through systems using electronic data messages or electronic documents; or
d. transact the government business and/or perform governmental factions using electronic data messages or electronic documents, and for the purpose, are authorized to adopt and promulgate, after appropriate public hearing and with due publications in newspapers of general circulation, the appropriate rules, regulations, or guidelines, to, among others, specify
–
1. the manner and format in which such electronic data messages or electronic documents shall be filed, created,
retained or issued;
2. where and when such electronic data messages or electronic documents have to signed, the use of an electronic
signature, the type of electronic signature required;
3. the format of an electronic data message or electronic document and the manner the electronic signature shall be
affixed to the electronic data messages or electronic documents;
4. the control processes and procedures appropriate to ensure adequate integrity, security and confidentiality of
electronic data messages or electronic documents or records of payments;
5. other attributes required to electronic data messages or electronic documents; and
6. the full or limited use of the documents and papers for compliance with the government
requirements: provided, That the Act shall be itself mandate any department of the government, organ of state or
statutory corporation to accept or issue any document in the form of electronic data messages or electronic documents
upon the adoption, promulgation and publication of the appropriate rules, regulations or guidelines.
49
Time of Dispatch of Electronic Data Messages or Electronic Documents
General rule: the **dispatch** of an electronic data message or electronic document occurs when it **enters an information system outside the control of the originator** or of the person who sent the electronic data message or electronic document on behalf of the originator.
50
Time of Receipt of Electronic Data Messages or Electronic Documents
a. Upon **entry in the designated information system**
b. Upon **retrieval by the addressee**:
i. There is a designated information system, but the **originator and the addressee are both participants** in the designated information system;
ii. The electronic message or electronic document enters an information system of the address that is **not the designated information system**;
c. Upon **entry in the information system of the addressee** - the parties **did not designate an information system**
51
Place of Dispatch and Receipt of Electronic Data Messages or Electronic Documents
1. **dispatched** at the place where the **originator has its place of business** and
2. **received** at the place where the **addressee has its place of business**.
a. Originator or addressee has **more than one place of business** - **closest relationship** to the underlying transaction or, when there is nor underlying transaction, **principal** place of business
b. **Does not have** a place of business - **habitual residence**; or
c. The **"usual place of residence"** in relation to a body corporate, means that **place where it is incorporated** or otherwise legally constituted.
