Securities Regulation Code Flashcards
SRC aims to protect investing public.
In what ways?
1. full disclosure of information
(a) approval of registration statement
(b) approval of prospectus
2. regular submission of material information
3. close monitoring of securities
4. grant SEC necessary powers
Yes
Broker vs Dealer
- Broker → for account of others
- Dealer → ordinary course of business
Yes
Who is the implementing agency of SRC?
SEC
Securities
- shares of stocks
- bonds, debentures, notes
- asset-backed securities
- investment contracts
- fractional undivided interest in OIL/GAS
- options and warrants
- certificates
- others
Yes
Registration of Securities
- need to have registration statement
- public offering → need to have registration statement
- private offering → X
Yes
Procedure for Registration
- payment of filing fees → what is the maximum?
- publication → 2 general newspapers once for 2 consecutive weeks
- approved or rejected → within 45 days after date of filing or date to which issuer consented
- if approved → prospectus under oath
1/10 of 1%
Securities Exempt from Registration (GGRIB)
Reason : Issuer is trusted / regulated by another government agency
- by Government of PH
- by Government of other country (with diplomatic relations)
- ?
- regulated by Insurance Commission, Housing and Land Use Rule Regulatory Board, or BIR
- ?
- by Receiver or Trustee in bankruptcy duly approved by proper adjudicatory body
- by Bank (XPN : own shares of stock)
Transactions Exempt from Registration (BICEPS SMILE Q)
Reason : Transactions are small / limited / approved by court / for debt only.
- Broker’s transaction
- ?
- right of Conversion
- ?
- Private placement → sale to fewer than 20 persons
- Stock dividends
- ?
- ?
- Insolvency → judicial sale
- ?
- ?
- Qualified Buyers → bank, registered investment house, insurance company, pension fund (maintained by government, investment company)
- Isolated transaction
- Exclusive sale → capital stock to own stockholders (no renumeration is given)
- Subcription → prior to incorporation or for increase in capital stock (no renumeration is given)
- Mortgage-backed securities → sold to purchaser at a single date
- to Liquidate a bonafide debt → in the ordinary course of business
- Exclusive exchange of securities → by issuer with existing holders (no renumeration is given)
Tender Offer
- intention to acquired outstanding securities of a public company
- Purpose → to protect minority
Process
- announcement → newspaper before commencement of offer
- at least 2 days before → file to SEC, deliver a copy to each exchange where the shares is listed
- report results → file to SEC (within 10 days)
Yes
When is Tender Offer mandatory?
- acquire at least ? of a public company
Public Company
- listed corporation
- with asset of at least ? AND at least ? shareholders each having at least ? shares
% → applies also to indirect acquisitions
- at least 35%
- less than 35% but will result to ownership of over 50%
- assets → at least 50M
- shareholders → at least 200
- shares → at least 100
AND → dapayt both requirements macomply
Transactions Exempt from Mandatory Tender Offer
any purchase of securities
- from unissued capital stock (will not result to 50% ownership)
- from increase in authorized capital stock
- in connection with foreclosure proceedings
- in connection with privatization by the government
- in connection with corporate rehabilitation under court supervision
- through open market (at market price)
- merger or consolidation
Yes
Insider → has access to material non-public information
- issuer
- director or officer
- with relation to the ones above
Insider Trading
- insider transacts on the securities
- unlawful
- XPN : if person can prove that the information is not gained from an insider
- XPN : if person can prove that he disclosed the info to the other party or he had reason to believe the other party has access to the same info (other party → identified)
Yes
