Securities Regulation Code Flashcards
Position of the sec
a chairperson and 4 commissioners
What are the four principal departments of the sec
- The market and securities regulation department
- The corporate governance & finance department
- The company registration and monitoring department
- The enforcement and investor protection department
It develops to registration criteria for all market participants and supervises them to ensure compliance with registration requirements and endorses in fractions of the code and rules and regulations to the enforcement and investor protection department. It registers equity securities and debt instruments or recommends their exemption from registration before they are sold, offered for sale, or distributed to the public and ensures that full, timely and accurate information is available about the set securities
market and securities regulation department
Mutual funds, including exchange-traded funds, membership certificates, club shares, both proprietary and non-proprietary, and timeshares before they are offered for sale or sold to the public and ensures that adequate information is available about this insecurities. It also ensures that investors have access to all material disclosures regarding the said offering and the securities of all public companies. It also monitors compliance by the above verse with the code and rules and regulations adopted thereunder and compliance of financing, lending conditions with existing laws
the corporate governance & finance department
It registers domestic corporations, partnerships and association, including representative offices and foreign corporations intending to do business in the philippines. It also supervises and monitors such entities relative to their compliance with laws administered by the commission
the company registration and monitoring department
It ensures compliance by all market participants, issuers and individuals, and takes appropriate and forcement action against them from illegal in fraction of the code and other relevant laws administered by the commission
The enforcement and investor protection department
True or false. No securities shall be sold or offered for sale or distributed by any person or entity within the philippines unless such securities or duly registered with the sec
true
Upon filing of the registration statement of securities, the issuer shall pay the commission a fee of not more than ______________ of the maximum aggregate price at which such securities are proposed to be offered
1/10 of 1%
Within _________ after the date of filing of the registration statement or by such later date to which the issuer has consented, the sec shall declare the registration statement effective or rejected, unless the applicant is allowed to amend registration statement
45 days
True or false. Insolvency of the issuer is a ground for rejection or revocation of registration of securities
true
Grounds for rejection or revocation of registration of securities
(IVF3IM)
- Insolvency
- Violation of the code
- Fraudulent transactions
- False material facts in any prospectus
- Failed to comply with any requirements of the commission
- Incomplete or inaccurate registration statement; misleading
- Moral turpitude
Grounds for suspension of registration of securities (IR)
- Information contained in the registration statement is misleading; sale or offering for sale of the security tend to work a fraud
- Refusal to furnish information required by the sec
These are shares, participation or interest in a corporation or in a commercial enterprise or profit-making venture and evidenced by a certificate, contract or instruments
securities
Exempted transactions from requirement of registration with sec
ILIDCSCBSE20Q
insolvency or bankruptcy
liquidation of debt
isolated transaction
stock dividend or other distribution of surplus
sale of capital stock to its shareholders exclusively where no commission is paid
and time mortgaged together with all the bones or note secured thereby or sold to a single purchaser at a single sale
conversion
brokers transaction
subscription before incorporation
existing securities; no commission
to fewer than 20 persons in the philippines during a 12-month period
to qualified buyers
True or false. The own shares of stocks of a bank is not required to be registered with the sec
false; all securities issued to the public which are not regulated or supervised by another regulatory body shall be required to register to sec
It means a publicly announced intention by a person acting alone or in concert with other persons to acquire outstanding equity securities of a public company as defined in src or outstanding equity securities of an associate or related company of such public company which controls the said public company
tender offer
It means a publicly announced intention by an issuer to reacquire any of its own class of equity securities or by an associate of such a sugar to acquire such securities
issuer tender offers
Any person or group of persons acting in concert who intends to acquire _______ of equity securities in a public company in one or more transactions within a period of 12 months shall file a declaration to that effect with the sec
15%
Any person or group of persons acting in concert who intends to acquire _______ of the outstanding voting shares or such outstanding voting shares that are sufficient to gain control of the bored in a public company in one or more transactions within a period of 12 months shall disclose such intention and contemporaneously make a tender offer for the percentage sought to all holders of such securities within the said period
35%
If any acquisition that would result in ownership of over ________ of the total outstanding equity securities of a public company, the acquirer shall be required to make it tender offer under this rule for all the outstanding equity securities to all remaining stockholders of the said company at a price supported by a furnace opinion provided by an independent financial adviser or equivalent third-party. The acquirer in such a tender offer shall be required to accept all securities tendered
50%
True or false. Acquisition of 50% or more ownership of securities or such percentage that is sufficient to gain control of the board from the an issued capital stock is exempted from mandatory tender offers
false; purchase from an issued capital stock are exempt provided that the acquisition will not result to a 50% or more ownership of securities or such percentage that is sufficient to gain control of the board
True or false. Any purchase of securities from an increase in authorized capital stock is exempted from mandatory tender offers
true
Transactions exempted from mandatory tender offers
(UIFPROM)
unissued capital stock
increase authorized capital stock
foreclosure proceedings
privatization
rehabilitation
open market
merger or consolidation
True or false. Ara acquisition or repurchase by an issuer of its own securities shall only be made if such issuer has unrestricted retained earnings in its books to cover the amount of shares to be purchased
true
Tender offer shell, unless withdrawn, remain open until the expiration of
_____________ from its commencement; provided that an offer should as much as possible be completed within __________ from the date the intention to make such offer is publicly announced or
____________ from the date of notice of change in the percentage of the class of securities being sought or in the consideration offered is first published, sent or given to security holders
20 business days; 60 business days; 10 business days
In a mandatory tender offer, the offeror shall be compelled to offer the highest price paid by him for such securities during the preceding _____________
6 months
The offertory in a tender offer shall permit the securities standard to be withdrawn at any time during the period such tender offer remains open and if not yet accepted for payment after the expiration of _____________ from the commencement of the tender offer
60 business days
The opera in a tender offers and either pay the consideration offered, or return the tendered securities not later than ____________ after the termination or the withdrawal of tender offer
10 business days
True or false. No person shall sell or offer for sale to the public any preneed plan except in accordance with rules and regulations which the commission shall prescribe
true
Covered entities for the securities regulation code rule 68 or financial reporting requirements
- Stock corporations with paid up capital of _______________
- Non-stock corporations with total assets of ________________ or gross and receipts of _____________
- Branch offices of stock foreign corporations with total assets in the equivalent amount of __________________
- Branch offices of non stock corporation with total assets in the equivalent amount of _______________
- Regional operating headquarters of foreign corporations with total revenues in the equivalent amount of _________________
50,000 or more
500,000 or more; 100,000 or more
1 million or more
1 million or more
1 million or more
It means a set of accounting principles, standards, interpretations and pronouncement that must be adopted in the preparation and submission of the annual financial statements of a particular class of entities as defined in this role by the commission
financial reporting framework
Error means and unintentional mistake in the financial statements which reduces or increases the consolidated total assets, total liabilities or income of the company by ________
5%
It means an intentional act by one or more individuals among management, employees or third parties that results in a misrepresentation of financial statements which reduces or increases the consolidated total assets liabilities or income of the company by 5%
fraud
It means wanton or reckless disregard of the duty of due care in complying with the philippine standards on auditing
gross negligence
It means and information whose omission or misstatement would influence the economic decisions of its users
material information
Subsidiary is a significant subsidiary of the corporations and its others subsidiaries investments in and advances to the subsidiary exceed ________ of the total assets of the corporation and its subsidiaries consolidated as of the end of the most recently completed fiscal year
10%
It shall mean the presentation of summarize financial information as to the assets, liabilities and results of operation of the entity for which the information is required
summarize financial information
A large and or or public accountable entities
have total assets of more than ____________ or total liabilities of more than __________
those which required to file financial statements on their part 2 of src rule 68
those in the process of filing their financial statements for the purpose of issuing any class of instruments in a public market
those which are holders of secondary licenses issued by the regulatory agencies
350 million; 250 million
Medium-sized entities have total assets of between _____________________ or total liabilities of between __________________. If the entity is a parent company, the said amount shall be based on consolidated figures
100 million to 350 million; 100 million to 250 million
True or false. medium-sized entities are required to file financial statements under part 2 of src rule 68
false; also not in the process of filing there fss for the purpose of issuing any class of instruments in a public market and or not holders of secondary licenses issued by regulatory agencies
Small Entities have total assets of between _______________ or total liabilities of between ____________________. If the entity is a parent company the said amount shall be based on consolidated figures.
3 million to 100 million; 3 million to 100 million
Micro entities have total assets and liabilities ______________
below 3 million
True or false. It is the board of directors or trustees who are responsible for overseeing the company’s financial reporting process and responsible for reviewing and approving the financial statements including the schedules attached therein and submitting the same to the stockholders or members
true
The independent auditors or in the case of an audit firm, the signing partner of the aforementioned regulated entities shall be rotated after every _____________ of engagement. A __________ cooling off period shall be observed in the engagement of the same signing partner or individual auditor
5 years; 2 years