SRC

Question 1

Purpose of mandatory tender offer

Answer 1

1. protect the minority shareholders
2. provide them with a fair share price

Question 2

Mandatory Tender Offer
(3)

Answer 2

1. at least 35% over a period of 12 months of any class of equity OR
2. acquisition will result to a total interest MORE THAN 50% of any Listed corporations / Public corporations
3. only 15% of equity securities in public corporations (file a petition to the SEc to that effect)

Question 3

Public Corporation
50 - 200 - 100

Answer 3

• assets at least 50M
  AND
• at least 200 shareholders owning at least 100 shares each

Question 4

Exempted from Tender Offer
(7) PA FORUM

Answer 4

Privatization by government
Authorized capital stock - increase

Foreclosure proceedings
(acquirer is the debtor or creditor)
Open market
(through stock exchange) at prevailing price
Rehabilitation- corporate
Unissued capital stock provided it will not result to
ATLEAST 50% ownership
Merger or consolidation

Question 5

Process for Mandatory Tender Offer

Answer 5

1. Announcement; 2 business days before the commencement of offer
2. SEC 19-1
3. report to SEC, not later than 10 days from termination of tender offer.

T.O.
2 letters means 2 business days
looks like 10 - 10 days to report to SEC

Question 6

SRC is also known as

Answer 6

RA 8799
Blue sky Law

Question 7

Investment contract

Answer 7

• invests in a common enterprise
• and is led to expect profits
• PRIMARILY from the efforts of others.

Question 8

Securities
(Read mo lang)

Answer 8

1. stocks, bonds, debentures, notes, asset backed securities
2. investment contract, certificate of interest or participation in a profit sharing agreement, CDs,
3. fractional undivided interest in oil, gas, or other mineral
4. derivatives like options and warrants
5. certificate of assignments, certificate of participation, trust certificate, voting trust certs
6. proprietary and nonproprietary membership certificates in corporations

Question 9

Basic rule in sale of securities

Answer 9

SEC registered
- registration statement
- duly approved by SEC

Question 10

Process in SEC registration for sale of securities

Answer 10

• file sworn registration
• filing fees max. 1/10 of 1% of the aggregate price of proposed offerings
• 2 consec weeks - publication notice once a week for the filing of registration
• 45 days after filing, SEC order
• prospectus - info related to issuer and sec

Question 11

EXEMPT FROM SEC REGISTRATION
Securities (GRIB)

Answer 11

Gov securities (Philippines or foreign country with diplomatic relation)

certificates issued by Receiver or trustee under bankruptcy

under the supervision of Insurance commission, HLURB or BIR

Securities issued by Bank except its own shares.

Question 12

EXEMPT FROM SEC REGISTRATION
Transactions
BISCEPS SMILE

Answer 12

Broker’s transaction on the SEC or trading market
Isolated transaction
Stock dividend
Conversion
Exclusively sale
Private placement - fewer than 20
Subscription
- prior to incorporation and increase in authorized
capital stock
- unissued capital stock, not exempted

Sophisticated buyer (qualified buyer) business na nila
- bank
- registered inv. house or inv. company
- insurance company
- pension fund or retirement plan
*maintained by gov or
*by bank or other persons under the BSP
Mortgaged backed securities
Insolvency or bankruptcy sale
Liquidate a bona fide debt (securities are pledged or mortgaged)
Exchange of securities

Question 13

GIS deadline

clue: 3 letters ang GIS

Answer 13

30 days from
stock - ASM
non-stock - AMM
foreign - issuance of license

Question 14

Filing of AFS with BIR stamp to SEC

Answer 14

1. calendar year
   - scheduled by SEC (last digit of SEC number)*
   - may be filed before the first day stated in the coding schedule (on or before April 15)
   *After April 15 as sched
2. fiscal year
   GR: 120 calendar days from end of fiscal year
   Except:
   1. broker - 110 calendar days
   2. listed and public entities - 105 days

Question 15

Elements of Insider Trading
IBM

Answer 15

Insider
Material non public info
Buy or sell of securities

Question 16

Who is an INSIDER?
TRIGoD

Answer 16

Tippy - a person who obtains the mat non public info
from the next 4 by COMMUNICATION
Relationship or former relationship with the issuer
Issuer
GOv (person or agency related to sale of sec)
Director

Question 17

Exceptions to insider trading

Answer 17

1. information is not from an insider
2. the seller of securities disclosed the info to allow him to decide or is in possession of the info

Question 18

Presumption of insider trading

Answer 18

buy or sell of securities by the insider or his spouse or relatives by affinity or consanguinity within the 2ND degree, legitimate or common-law is made while in possession of material non-public info if transacted

1. after the info came into existence
2. but prior to dissemination of info to public

Question 19

Insider trading vs. Tender Offer

Answer 19

1. insider becomes ANY person
2. in possession of material non-public information
3. related to tender offer

Question 20

Liability for disclosure by the insider

Answer 20

1. here the insider did not transact but disclose it to another who will potentially make transaction
2. disclosure attaches separate liability from the insider trading itself regardless of whether the potential transaction of the other person took place or not

Question 21

Other Fraudulent practices SRC

Answer 21

1. wash sale* - iisa lang
2. match order* - dalawang tao

*GR: not illegal
Except: they intend deceive the public that the
shares are actively traded to increase the price

1. marking the close
2. painting the tape
3. squeezing the float
4. hype and dump
5. boiler room operations
   GR: not illegal
   Except:
6. increase the price
7. depress the price
8. creates fictitious active trading
9. circulating info on share price
10. Misleading misstatements
    Illegal per se
11. pegging or fixing the price
12. short sale - not illegal; only regulated