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Questions and Answers
The penalty assessed by Director Callangan amounted to ₱1,937,262.80.
The penalty assessed by Director Callangan amounted to ₱1,937,262.80.
True
The Philippine Veterans Bank is classified as a private company under the SRC reportorial requirements.
The Philippine Veterans Bank is classified as a private company under the SRC reportorial requirements.
False
The SEC confirmed that the tender offer rule applies to the indirect acquisition of shares.
The SEC confirmed that the tender offer rule applies to the indirect acquisition of shares.
True
The existing SEC rules have increased the threshold acquisition of shares from 30% to 35%.
The existing SEC rules have increased the threshold acquisition of shares from 30% to 35%.
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National Life Insurance Company successfully compelled Cemco to comply with the tender offer rule.
National Life Insurance Company successfully compelled Cemco to comply with the tender offer rule.
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The legislative intent of the tender offer rule is to prevent control over a listed company.
The legislative intent of the tender offer rule is to prevent control over a listed company.
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Direct acquisitions are the only method regulated by the tender offer rule.
Direct acquisitions are the only method regulated by the tender offer rule.
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The issuance of a tender offer is required if control is acquired through any type of acquisition.
The issuance of a tender offer is required if control is acquired through any type of acquisition.
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A clearing agency is an organization that facilitates the settlement of securities transactions by ensuring both parties complete their commitments.
A clearing agency is an organization that facilitates the settlement of securities transactions by ensuring both parties complete their commitments.
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Depositories hold physical certificates of securities for easier ownership transfer.
Depositories hold physical certificates of securities for easier ownership transfer.
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The Commission has the authority to expel any member from a self-regulatory organization for willful violations.
The Commission has the authority to expel any member from a self-regulatory organization for willful violations.
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Clearing Corporations check and confirm trade details but are not involved in preventing fraudulent practices.
Clearing Corporations check and confirm trade details but are not involved in preventing fraudulent practices.
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The Commission can impose limitations on the activities of a self-regulatory organization for up to 24 months.
The Commission can impose limitations on the activities of a self-regulatory organization for up to 24 months.
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Fair procedures for disciplining participants are required in the rules of a clearing agency for its registration.
Fair procedures for disciplining participants are required in the rules of a clearing agency for its registration.
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Equitable allocation of fees among participants is not necessary for the approval of a clearing agency.
Equitable allocation of fees among participants is not necessary for the approval of a clearing agency.
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The primary function of a clearing agency is to promote fraudulent practices in trading.
The primary function of a clearing agency is to promote fraudulent practices in trading.
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Section 59 establishes that individuals who manipulate security prices are liable for damages to others who purchase or sell these securities.
Section 59 establishes that individuals who manipulate security prices are liable for damages to others who purchase or sell these securities.
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The Securities and Exchange Commission (SEC) has jurisdiction only over corporations and not over partnerships or associations.
The Securities and Exchange Commission (SEC) has jurisdiction only over corporations and not over partnerships or associations.
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Exemplary damages may be awarded if a violation of the Securities Regulation Code is characterized by wantonness.
Exemplary damages may be awarded if a violation of the Securities Regulation Code is characterized by wantonness.
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The maximum amount for attorney's fees awarded in suits under the SRC does not exceed 50% of the damages awarded.
The maximum amount for attorney's fees awarded in suits under the SRC does not exceed 50% of the damages awarded.
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Persons specified in Sections 56 to 61 of the SRC are liable for damages jointly and severally.
Persons specified in Sections 56 to 61 of the SRC are liable for damages jointly and severally.
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Civil liability for manipulating security prices can only be pursued within one year after discovering the violation.
Civil liability for manipulating security prices can only be pursued within one year after discovering the violation.
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The SEC has the ability to issue cease-and-desist orders to prevent harm to the investing public.
The SEC has the ability to issue cease-and-desist orders to prevent harm to the investing public.
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Jurisdiction defined in Republic Act No. 8799 only pertains to the SEC's regulatory powers and does not include sanctions for violations.
Jurisdiction defined in Republic Act No. 8799 only pertains to the SEC's regulatory powers and does not include sanctions for violations.
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It is unlawful for a member-broker to make a transaction on the Exchange for their own account.
It is unlawful for a member-broker to make a transaction on the Exchange for their own account.
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No individual can own or control more than 10% of the voting rights of the Exchange.
No individual can own or control more than 10% of the voting rights of the Exchange.
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The Exchange must have rules to suspend its members for violations of law and regulation.
The Exchange must have rules to suspend its members for violations of law and regulation.
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Brokers on the board of the Exchange are allowed to make transactions for their own accounts without restrictions.
Brokers on the board of the Exchange are allowed to make transactions for their own accounts without restrictions.
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The Commission must decide on the application for Exchange registration within 60 days.
The Commission must decide on the application for Exchange registration within 60 days.
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A business group can own up to 30% of the voting rights of the Exchange.
A business group can own up to 30% of the voting rights of the Exchange.
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Transactions necessary for odd-lot transactions are exempt from the prohibition against member-brokers' transactions for their own account.
Transactions necessary for odd-lot transactions are exempt from the prohibition against member-brokers' transactions for their own account.
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The registration of an exchange can be granted only if it operates as a stock corporation.
The registration of an exchange can be granted only if it operates as a stock corporation.
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Disclosure of trade secrets is required by the Regional Trial Court.
Disclosure of trade secrets is required by the Regional Trial Court.
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The petitioners had been depositors at Citibank's Binondo Branch since 1996.
The petitioners had been depositors at Citibank's Binondo Branch since 1996.
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The Commission's action implies it has passed judgment on the merits of any security or transaction.
The Commission's action implies it has passed judgment on the merits of any security or transaction.
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The securities sold to the petitioners were registered with the Securities and Exchange Commission (SEC).
The securities sold to the petitioners were registered with the Securities and Exchange Commission (SEC).
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The Commission may assist foreign enforcement authorities regarding securities violations.
The Commission may assist foreign enforcement authorities regarding securities violations.
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Citibank's argument for dismissing the case was that it should be handled by the Commission.
Citibank's argument for dismissing the case was that it should be handled by the Commission.
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Jose was required to open an account to purchase securities after being invited to dinner by the branch manager.
Jose was required to open an account to purchase securities after being invited to dinner by the branch manager.
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The funds sent to SCB branches were in local currency.
The funds sent to SCB branches were in local currency.
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Suspension or revocation of registration for offering securities is one type of sanction under Section 54.1 of the Securities Regulation Code.
Suspension or revocation of registration for offering securities is one type of sanction under Section 54.1 of the Securities Regulation Code.
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Fines under the Securities Regulation Code can never exceed PHP 10,000.
Fines under the Securities Regulation Code can never exceed PHP 10,000.
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Individuals can be disqualified from serving as officers or directors if they violate certain sections of the SRC.
Individuals can be disqualified from serving as officers or directors if they violate certain sections of the SRC.
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Profit-based fines for specific violations are capped at the total amount of the profits gained.
Profit-based fines for specific violations are capped at the total amount of the profits gained.
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Criminal charges cannot be filed if administrative sanctions have already been imposed.
Criminal charges cannot be filed if administrative sanctions have already been imposed.
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Only the issuer can be held liable for false statements in a registration statement.
Only the issuer can be held liable for false statements in a registration statement.
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Damages under Section 56 of the Securities Regulation Code can be sought by any person who acquires a security with an untrue statement in its registration statement.
Damages under Section 56 of the Securities Regulation Code can be sought by any person who acquires a security with an untrue statement in its registration statement.
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Additional penalties under Section 54.1 can be imposed at the Commission's discretion.
Additional penalties under Section 54.1 can be imposed at the Commission's discretion.
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Study Notes
Pre-need Plans
- Pre-need plans are contracts for future services or payments, paid in cash or installments.
- They cover various needs like life, pension, education, and interment.
- Plans are regulated by the Securities and Exchange Commission (SEC).
Pre-need Plan Regulation
- Plans must be registered with the SEC before sale.
- Individuals or entities selling plans need SEC licenses.
- Potential plan holders must receive clear information on terms, fees, benefits, and risks.
- Advertising must follow SEC guidelines to avoid misleading claims.
- Pre-need companies have to use a uniform accounting system, submit reports, and maintain detailed records.
- Minimum capital requirements are set for financial stability.
- Trust funds are required to ensure proper use of collected money.
Disclosure Rule
- Disclosure rules require comprehensive information about financial status, operations, and developments.
- Offered by institutions like companies offering pre-need plans, or other securities.
Annual Report Requirements
- Reports must be submitted within 135 days of the fiscal year end or a deadline.
- Reports contain balance sheets, profit and loss statements, cash flow statements.
- Reports also include an analysis of the company's operations and results certified by an independent public accountant.
Applicability of Reportorial Requirements
- Registered securities issuers are generally required to comply with reportorial obligations.
- Smaller companies with less than 100 security holders may be exempt, if notified to SEC.
- Companies listed on exchanges are always required to adhere to reportorial requirements.
Tender Offer Definition
- A public intention by a person(s) to acquire equity securities of a listed company.
- Protects minority investors against potential value dilution.
Tender Offer Requirements
- Acquiring at least 15% of a public company's securities.
- Acquiring at least 30% equity interest within 12 months.
Financial Information Required in Proxy Solicitations
- Proxies must be written, signed and filed with the company well before a meeting.
- Proxies must state which meeting it is intended for.
- Proxies cannot be valid for more than five (5) years.
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Description
This quiz covers key concepts related to tender offers, SEC rules, and the implications of acquisitions in the context of Philippine securities law. Test your knowledge on the legislative intent behind these regulations and the roles of private companies and clearing agencies in the financial landscape.
