Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

RFLIB > Securities Regulation Code > Flashcards

Securities Regulation Code Flashcards

1
Q

What is the Republic Act of SRC? Its purpose?

A

Republic Act No. 8799 to protect the investing public

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What are securities?

A

Shares, participation, or interest in a corporation or in a commercial enterprise or any profit-making venture

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Securities are evidenced by what?

A

Contracts, certificates, instruments

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What form does the evidences of a security need to take?

A

Either written or electronic

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What is the main feature of a security?

A

It is acquired with the expectation of asset appreciation or increase in value primarily throught the efforts of another

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What are investment contracts?

A

a contract, transaction or scheme where a person invest their money in a common enterpise and is led to expect profits primarily from the efforts of others

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What are the requisites of an investment contract?

A
  1. An investment of money
  2. In a common enterprise
  3. With expectation of profits
  4. Primarily from the efforts of others (Modified Howey Test)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What is the Howey Test? and how is the Philippines using it in a modified way?

A

The Howey Test defines an investment contract as a contract wherein the profit to come from solely the efforts of others. The Philippines modifies this by changing the word solely to primarily.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

How does the SRC protect the investors from fraudulent securities?

A
  1. No security can be sold or offered within the PH without being registered through a registration statement, filed, and approved by the SEC
  2. Prior to sale, information about the security shall be available to prospective buyers
  3. The SEC may audit the firm applying for registrations whenever deemed necessary
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What are the steps in registration of a Security

A
  1. Sworn Registration Statement
  2. Payment
  3. Publication
  4. Order of Declaration
  5. Prospectus
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What are the requisites of a Sworn Registration Statement?

A
  1. Signatories of Executive Officer (EO), Principal Operating Officer (POE), Principal Financial Officer (PFO), Controller, Principal Accounting Officer (PAO) , Corporate Secretary (CS)
  2. Written consent of named expert
  3. A written certification of selling shareholders to the accuracy of the registration statement
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Payment of the filing fees shall not exceed?

A

1/10 of 1% of the aggregate price at which the securities are to be offered

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

How often should the notice of registrationg filing be publicized?

A

Once for two consecutive weeks in two newspapers of general circulation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

How many days after the date of filing should the SEC give a decision?

A

45 days or by such later date to which the issuer has consented

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Attached with the registration statement, and is a document that serves as an oath that all requirements and statements in the registration are correct?

A

Prospectus

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What is the rationale of exempt securities?

A

Securities that are issued by the government are already guaranteed because of its nature (assumption that the government is just and honest)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

What are the securities that are exempted from registration?

A
  1. Security Issued or guaranteed by the government or by any institution or indvidual representing it
  2. Security issued or guaranteed by the government of any country which are in diplomatic relations with the philippines
  3. Cerificates issued by a receiver or by trustee in bankruptcy duly approved by the proper adjudicatory body
  4. Any security under the supervision of Office of Insurance Commission (OIC), Housing and Land Use Regulatory Board (HLURB), or the Bureau of Internal Revenue (BIR)
  5. Any security issued by a bank except its own share.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Are securities issued by pakistan exempt from registration (assuming that it has no diplomatic relations with the PH)

A

No

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

What is the basis upon the exemption of securities of countries that the Philippines has diplomatic relations with?

A

Reciprocity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Why are securities under the supervision of OIC, HLURB, and BIR exempt?

A

To avoid overlapping jurisdiction

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Are securities owned by banks exempted from registration?

A

No, on the basis that it is acting as a profit-making venture rather than an intermediary which is what is exempted from registration.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

How many persons should it be to be a transaction exempted from registration?

A

fewer than 20 during any twelve month period

23
Q

When would a exchange of securities be considered an exempt transaction?

A

When the issuer and the entity exchanged with did not pay anything or commission is paid for the exchange

24
Q

What is type of capital stock is an exempt transaction and why?

A

Subscrption shares of the capital stock of a corporation PRIOR to incorporations or for increasing it authorized capital stock

25
Q

A broker’s transaction is exempt from registration if?

A

It is executed upon a customer’s order on any registered exchange

26
Q

When are issuance of bonds or notes securd by mortgage upon real estate or tangible property exempt transactions?

A

when the entire mortgage along with the notes or bonds secured are sold to a single purchaser at a single sale

27
Q

Whaat law is the basis for the exemption of judicial sale in insolvency or bankruptcy

A

insolvency law

28
Q

Distribution of a corporation of its securities is exempted because of?

A

The revised corporation code. It is considered as stock dividends and therefore doent require registration

29
Q

Repeated transactions are not required to be registered to the SEC?

A

False, because only isolated transactions are exempted.

30
Q

The sale of securities to any nunmber of the following buyers are exempted from registration.

A
  1. Banks
  2. Registered Investment House
  3. Insurance Company
  4. Pension Fund or retirement plan maintained by the government
  5. Investment company
31
Q

The annual report of an issuer must be compose of what financial reports?

A

Balance Sheet, Proft and Loss, Cash Flows CERTIFIED BY A CPA

32
Q

What are the requisites for an issuer to report to the SEC?

A
  1. Which has sold a class of its securities pursuant to a registration
  2. With a class of securities listed for trading in an exchange
  3. With assets of at least 50 million pesos and having 200 or more holders each having 100 shares of a class of its equity securities.
33
Q

What is the exception to the reporting requirement number 3?

A

The obilgation to report will diminish 90 days after notification to the SEC that the number of its holders holding at least one hundred shares have been reduced to less than 100

34
Q

How does the SRC protect the public?

A
  1. Require full disclosure of information to the public regarding the securities being offerend and the issuers including the approval of registration statements and prospectus
  2. Regular submition of reports
  3. Close monitoring of securities and persons such as brokers, issuers and the exchange itslf
  4. Prohibiting and penalizing fraud
  5. Giving SEC the powers and functions
35
Q

What is a tender offer?

A

offer by a person or group of person to the stockholders of a corporation to tender their shares for purchase

36
Q

What is the purpose for the rules on tender offer?

A

To provide the minority shareholders with protection and to provide them with a fair price for their share

37
Q

What is the requirement for a mandatory tender offer?

A

When a person tries to acquire at least 35% of any calss of any equity security of a
1. Listed Corportation
2. Corporations with 50M assets and Shareholders of at least 200 each having at least 100 share

over a period of 12 months

38
Q

Is the 35% mandatory requirement an absolute rule?

A

No, because it would still apply even if it is less than 35% if it constitutes over 51% of the total outstanding equity securities of the public company.

39
Q

Does the tender offer rule apply to indirect acquisitions?

A

Yes.

40
Q

Purchase of shares are exempt from the mandatory tender offer if?

A

It is part of the unissiued capital stock and it does not exceed 50% or more ownership of shares

41
Q

Purchase of shares from ___ in Authorized capital Stock is ____

A

an increase, exempt

42
Q

Purchase in connection with ____ proceedings involving a duly constituted pledge or security arrangement where the acquisition is made by the ____ or ___

A

foreclosure, debtor, creditor

43
Q

Purchases by the government that are exempt from mandatory tender offer rule?

A

purchases in connection with privatization

44
Q

Purchases in connection with _______________ under court
supervision.

A

corporate rehabilitation

45
Q

Purchases through an ________ at the prevailing market price are exempt from the tender offer rule

A

open market

46
Q

Merger or consideration ar eexempt from the tender offer rule

A

False. It should be consolidation

47
Q

How many days prior to the commencement of the tender offer must you do the tender offer requirements?

A

2 business days

48
Q

What is the SEC Form required that you file for tender offer

A

19-1

49
Q

What must you do with the form prior to the commencmenet of the offer

A

Hand deliver a copy to the target company at tits principal executive office and to each exchange where the class of security is listed for trading

50
Q

How many days must you report the results of the tender off to the commission

A

not later than 10 days after the termination of the tender offer

51
Q

Who can be an insider?

A
  1. The issuer
  2. A director or officer of the issuer or a peron controlling the issuer
  3. A person whose relationship or former relationship to the issuer gives or gave him access to material non public information
  4. A person who learns such information by a communication from any of the foregoing
52
Q

When can a person with material non-public information buy or sell a security?

A
  1. when he can prove that the information was not gained from an insider
  2. If the other party is identified and he
    2.1 Disclosed the information or;
    2.2 Had reason to believe that the other person knows it as well
53
Q

Will a person who receives information regarding non public information be considered an insider?

A

Yes. Whether he acts on it or not.

RFLIB (7 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions