Chapter 4 Flashcards
argues that failures in financial markets have come about because of poorly designed incentive structures, inadequate competition, and inadequate transparency.
Joseph Stiglitz
Agencies involved to ensure the efficient working of the capital market
Securities and Exchange Commission
Insurance Commission
Bangko Sentral ng Pilipinas
What does SEC Regualtes
the Philippine Stock Exchange (PSE),
the Fixed Income Exchange and
Mutual funds.
regulates insurance firms and their products.
The Insurance Commission
regulates banks of all stripes, currency trading, and bank originated products and services.
Bangko Sentral ng Pilipinas
UITFs Meaning
Unit investment trust Funds
is a government agency created by law under Commonwealth Act No. 83 (the securities act) in 1936.
Securities and exchaneg commission
SEC primary task is to enforce compliance Its primary task is to enforce compliance with the following:
a. The Corporation Code
b. The Securities Regulation Code
c. The Investment Company Act
d. The Investment Houses Law
e. Financing Company Act
f. Securitization Act of 2004
g. Personal Equity and Retirement Account (PERA) Act of 2008
REIT Meaning
Real estate Investment Trust
AMLA Meaning
Anti Money Laundering Act
From a capital market investor’s point of view, the provisions of the Corporation code of the Philippines that are important in the creation of securities are:
Capital Stock
Treasury Stock
Pre-emptive Rights
Dividends Distribution
Merger
No corporation shall increase or decrease its capital stock or incur, create or increase any bonded indebtedness unless approved by a
majority vote of the board of directors and by a two-thirds (2/3) of the outstanding capital stock at a stockholders’ meeting duly called for the purpose.
are shares of stock which have been issued and fully paid for, but subsequently reacquired by the issuing corporation by purchase, redemption, donation or through some other lawful means.
Treasury Stocks
Such shares may again be disposed of for a reasonable price fixed by the board of directors.
Treasury Stocks
SRC meaning
Securities Regulation Code
is the law that regulates the sale of securities and securities market professionals.
Securities regulation Code
It was signed into law on July 19, 2000 and became effective on August 8, 2000.
SRC
RSA Meaning
Revised Securities Act
IRR Meaning
Implementing Rules and Regulations
SBL Meaning
Securities borrwing and Lendnig
MSLA Meaning
Master securities lending agreement
SLAA Meaning
securities lending authorization agreements
is the practice of formerly unlisted firms to purchase a majority control of a dormant or inactive firm that is listed
Backdoor Listing
PERA Meaning
Personal Equity and retirement Account
as amended by RA 9194 was enacted to curb the flow and legitimization of illegally sourced or acquired funds.
Anti money laundering act of 2001
AMLC Meaning
Anti-Money Laundering Council
The AMLC is composed of ?
Heads of the BSP, the Insurance Commission and the SEC
Who is the chairperson of the AMLC
BSP Governor
has the authority to investigate complaints, referrals, covered, and or suspicious transaction reports.
AMLC
What are the highligts of Anti-money laundering act
AMLC
Unlawful Acts
Covered transactions
Rule 4 of the AMLA Implementing Rules and Regulations (IRR) likewise contains an extensive discussion of the offenses called
Predicate crimes and the penalties thereto.
ICA Meaning
Investment Company Act
is the law that regulates investment companies.
Investment Company Act
NAVPS Meaning
Net assets Value per Share
Regulation and creation and offering of securities for public offering, equity and tradable debt instruments in the Philippines is covered both by the
Corporation code and the SRC
NHMFC Meaning
National Home Mortgage and Finance Corporation
RMBS Meaning
Residential Mortgage-backed Securities
The PSE has three boards namely:
The First board
the second board
the small and medium Enterprise Board
Foreign domiciled listed firms in the PSE are currently in what board
First board
requirements for listing in PSE
Required documentations for IPO and /or listing
Size of public offering
What are the Required documentations for IPO and /or listing
audited financial statements,
prospectus (red herring and final offering), registration statement with the SEC, several corporate secretary certifications, offering timetable,
PDEX Meaning
Philippine Dealing and Exchange Sysetm
There are two classifications of required reports
Structured reports
Unstructured Rerports
are regular quarterly and annual reports. These reports must contain the firm’s financial statements and a corresponding management discussion and analysis of operations.
Structured Reports
are reports emanating from the firm at any given point in time during the year.
Unstructured Reports
is a report being mandated and voluminous, are submitted first to the SEC
Structured Reports
SRO Meaning
Self-Regulatory Organizations
is one who trades for his own account
Dealer
is one who trades for others or the customers’ account/s.
Broker
is a natural person offering or selling securities.
Salesman
Abuses or Examples of unlawful price manipulation practices as defined in the Rule include:
Painting the Ticket
Marking the Close
Hype and Dump
Squeezing the float
Wash Sales
Improper Matched Orders
engaging in a series of transactions in securities to give the impression of activity or price movement in a security;
Painting the Ticker
buying and selling securities at the close of the market in an effort to alter the closing price of the security;
Marking the close
engaging in buying activity at increasingly higher prices and then selling securities in the market at the higher prices;
Hype and Dump
taking advantage of a shortage of securities in the market by controlling the demand side and exploiting market congestion during such shortages in a way as to create artificial prices;
Squeezing the Float
engaging in transactions in which there is no genuine change in actual ownership of a security;
Wash Sales
engaging in transactions where both buy and sell orders are done at the same time with the same price and quantity by different but colluding parties.
Improper Matched Orders
CAIF Meaning
customer account information forms
are those holding more than ten percent of the shares outstanding.
Principal stockholders
is a publicly announced intention by a person, an entity, or a group of persons or entities, to acquire equity securities of a public company.
Tender Offers
The state collects its taxes through the?
bureau of Internal Revenue
NIRC Meaning
National Internal Revenue Code
Certain provisions of the Amended National Internal Revenue Code are:
Taxes on Dividends and Interest Income
Capital gains and stock transfers
Documentary stamp tax (DST)
Taxes on local exchange listing via IPO
Taxes on mutual funds’ dividends
Sale, barter or exchange of listed companies done through the PSE (local exchange) are subject to a tax rate of
½ of 1% of the gross amount received for the shares.
