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Securities Regulation and Cross-Border Transactions Course Outline
FRANCHETTE M. ACOSTA
Part I. Securities Regulation References: Securities Regulation Code 2004 Implementing Rules and Regulations of the Securities Regulation Code (www.sec.gov.ph) Business Organization and Finance: Legal and Economic Principles, 8th ed. by William A. Klein and John C. Coffee, Jr. Mergers, Acquisitions and Corporate Restructurings by Patrick A. Gaughan New Financial Instruments (Frontiers in Finance Series) by Julian Walmsley Securities Regulation Code by Lucila M. Decasa Securities Regulation, 4th Ed. by Larry D. Solderquist and Therese A. Gabaldon The Handbook of Financial Instruments by Frank J Fabozzi The Philippine Securities Regulation Code by Rafael A. Morales Using and Negotiating Over-the-Counter Derivatives Documentation by Christian A. Johnson June 27 and July 4, 2009 A. Securities Regulation Code and the Securities and Exchange Commission (“SEC”) Sections 1, 2, 4, 5, 53 and 64 of the Securities Regulation Code SRC Rule 1, 2, 4, 5.1, 7.2 and 40.5 Interim Rules on Intra-Corporate Controversies, A.M. No. 01-2-04SC dated March 13, 2001 Sections 5 and 6, P.D. 902-A Getting to know the SEC: Organizational Chart of the SEC (available in www.sec.gov.ph) ; current Commissioners of the SEC Reading Assignment: pp. 1- 9 and 36 - 60, Morales PSE vs. Court of Appeals, 281 SCRA 232 1
SEC Opinion dated 10-21-1982 addressed to Odyssey Park SEC Opinion dated 02-08-1996 addressed to Omni Health Care Organization SEC Opinion dated 04-16-1996 addressed to Atty.. 2008 Onapal Philippines Commodities. Inc. 1999 (FMA to provide) Just to get a background. G. Al. Court of Appeals. Corporation Code Rules Governing Redeemable and Treasury Shares Amended Rules for the Registration of Long Term Commercial Paper Amended Rules for the Registration of Short Term Commercial Paper pp. Court of Appeals. 161057.Speed Distributing Corp vs. Jr. Court of Appeals. 11 Section 6. 2 . vs. No. 3 – 9. Malkiel. Nicanor Zaratan. G. February 1. 164182. 2009 Chapter 2 (The Madness of Crowds). SEC. Definition of Securities Section 3 and 11. G. 425 SCRA 691 (2004) Morato et. 1993. Securities Regulation Code SRC Rule 3. 183905. 90707. 2008 economic meltdown. 9 – 35. Inc. Securities Regulation Code SRC Rule 3 Section 6. vs.R. Court of Appeals. 12 September 2008 Power Homes Unlimited Corp.R. Inc. 529 SCRA 355 (2007) GSIS vs. National Life Insurance Company of the Philippines. Court of Appeals. Morales pp. G. read up articles in the internet on Subprime Mess.R. No. dated April 16. Random Walk Down Wallstreet.R. Al vs. BF Homes. No. pre-need corporations problems in the Philippines (2008 to present) B. vs. Inc. 8. Quiambao. Burton G. February 26. No. 513 SCRA 243 (2007) Cemco Holdings. et. Decasa Philippine jurisprudence/ SEC Opinions Gabionza vs. 436 SCRA 438 (2004) Orendain vs. 506 SCRA 348 (2006) Yujuico vs. 9 and 41 Corporation Code Reading Assignment: Section 3.
United States District Court. 2d 523 In re Tucker Corp. SRC Rule 8. Supreme Court of the United States.C. Ernst & Young. 249 Procter & Gamble Company v. United States Court of Appeals. 421 U.structured products July 11.options (call and put options) . 1975. Jurisprudence SEC v. SRC Rule 8.. 837 International Brotherhood of Teamsters v. 429 U. Supp. 681 Reves v. Inc. 1996. cumulative). Life Partners. 1990. 2009 C. 328 U. 497 F. 10-06 dated 02-08-2006 U. 102 F. 551 SEC v. 1979. 925 F. 03-03 dated 01-22-2003 SED Opinion No.derivatives (equity. Howey Co. 1974. D. Supreme Court of the United States. foreign exchange derivatives) . 1996. Ohio.S. 1971. Supreme Court of the United States. Daniel.S. 494 U. v. 1947. United States Court of Appeals. convertible shares.J. v. 3d 587 United States v. redeemable shares) .3 3 .S.C. 1985. Incorporated.equity (common shares. nonparticipating. Western Division. Fifth Circuit. Registration of Securities Section 8 Requirements of Registration of Securities. Supreme Court of the United States. 2d 473 SEC v. 56 Read up articles in the internet on the definition of the following kinds of securities: . Securities and Exchange Commission.1. Inc. preferred shares (participating. 471 U. United States Court of Appeals. Supreme Court of the United States. credit.D. W. Jones. Landreth. 293 United Housing Foundation. 1946.S.SEC Opinion dated 01-02-1997 addressed to Kennedy Sarmiento SEC Opinion No. Circuit. 450 F. Forman. 1270 Landreth Timber Co. S.E. Koscot Interplanetary. Bankers Trust Company and BT Securities Corporation.. Fifth Circuit.debt . 26 S.S.S.
al. SEC Opinion dated 6 February 1996 addressed to Mr. Yuzon SEC Opinion No. Manuel Moraza SEC Opinion No. 35-03 dated 30 June 2003 addressed to Ms. 27 December 2007 Gabionza vs. Valleser SEC Opinion No. Dasmarinas Luis TIrso Revilla et al vs. SEC Memorandum 4 . Maiquez SEC Opinion dated 12 October 1995 addressed to Dr. Court Appeals and Securities and Exchange Commission. 10-06 dated 8 February 2006 addressed to Ms. 161057. No. 12 September 2008 Timeshare Realty Corporation vs. SRC Rule 10. Tomasa H. 19-04 dated 30 March 2004 addressed to Mr. Gonzalo T. 1993 Section 10 Exempt Transactions. Court of Appeals.R. Yuzon SEC Opinion dated 8 September 1997 addressed to Atty. Fernando SEC Opinion dated 27 April 1990 addressed to Atty.R. 137512 dated 27 September 2004 Standard Chartered Bank vs. A. Ltd. No. Luz Policarpio Say SEC Opinion dated 4 December 1998 addressed to Ms. Lipana SEC Opinion dated 16 January 1996 addressed to Air Liquide Asia Management Pte. G.R. Petralba. et. G. Inc. Geronimo SEC Opinion dated 14 January 1993 addressed to Imelda P. Claro P. 86738 dated 13 November 1991. Fuentesfina SEC Opinion dated 10 August 1984 addressed to Danto O. Ison SEC Opinion dated 12 January 1998 addressed to Ms.B. Edward S. A. No. de los Reyes SEC Opinion dated 30 April 1996 addressed to Atty. No. Senate Committee on Banks. SEC. G. G. 158941 dated 11 February 2008 Section 9 Exempt Securities. vs. SRC Rule 9. Jorge Ma. Fiorrello E. 167173.2 Union Bank of the Philippines vs. Porras SEC Opinion dated 26 May 1983 addressed to Santiago. SEC vs. Cortez. Cesar Lao and Cynthia V.1.R. Santos. Marcelo M. Tomas R. 358 SCRA 479 DOJ Opinion No. Court of Appeals. Reynaldo G. Jr. Azura SEC Opinion dated 22 June 1995 addressed to Mr. Dorenda M.SEC Opinion dated 18 June 1981 addressed to Mr. G.R. Parel SEC Opinion dated 11 April 1995 addressed to Mr. No. 144 s. SEC Opinion dated 7 November 1995 addressed to Atty. No. Jorge Ma. 10643132 dated 21 July 1995 Pp vs. Solomon Hermosura SEC Opinion dated 6 February 1996 addressed to Mr. Marietta B. Roberto O. G. Intermediate Appellate Court. Tinga & Associates SEC Opinion dated 26 July 1984 addressed to C.R. Financial Institutions and Currencies. Nestle Philippines. Tinga SEC Opinion dated 14 December 1984 addressed to Mr.
Reportorial Requirements Section 17 Periodic and Other Reports of Issuers. 2009 D. series of 1007 (Definition of Qualified Buyers under Section 10 of the Securities) July 18. 2008 (Rules Governing Registrars of Qualified Buyers). 1.2. 3. SRC Rule 17. Series of 2007 * Read articles on developments in the pre-need industry in the past year and a half. SEC Memorandum Circular No. 61 – 133. 7 and 9 of SEC Memo Circular No. 6. Regulation of Pre-Need Plans Section 16 Pre-Need Plans Rules 1. SRC Rule 14 Section 15 Suspension of Registration Section 51 Liabilities of Controlling Persons. 20. E. 16. 12. 22 – 52. 3. 2009 Section 12 Procedure for Registration of Securities.Circular No.5 Section 13 Rejection and Revocation of Registration of Securities Section 14 Amendments to the Registration Statement. Morales pp. Aider and Abettor and Other Secondary Liability Section 56 Civil Liabilities on Account of False Registration Statement Section 57 Civil Liabilities Arising in Connection with Prospectus.1 5 . particularly the SEC. Communications and Reports Section 62 Limitation of Actions Section 63 Amount of Damages to be Awarded Section 71 Validity of Contracts Reading Materials: pp. s. Decasa SEC Form 10-1 and SEC Form 12-1. sample prospectus July 25. 4. just to get an idea of the problems faced by the industry and the response of regulatory agencies. 12. sample registration statement. 21 and 22 of the 2001 New Rules on the Registration and Sale of PreNeed Plans Sections 3. 6. SRC Rule 12. 4.
addressed to Atty. 5 dated August 6. dated 7 August 2007 Sections 55. addressed to Leonor Noceda SEC Opinion dated 19 April 1988. SRC Rule 23 Union Bank of the Philippines vs. G. Protection of Shareholder Interests Sections 19 Tender Offers Sections 72. 25-06 dated 7 April 2006. v. Inc.SEC Form 17-A and 17-C Section 18 Reports by Five Per Centum (5%) Holders of Equity Securities. No. dated April 16. 136 – 151. 138949 dated 6 June 2001 Basic.2 and 72. Officers and Principal Stockholders. F. series of 2001 Annual Meetings and Proxy SEC Memorandum Circular No. 01-03 dated 7 January 2003. 2009 Readings: pp. 5. Rules and Regulations. Court of Appeals. No.R. G. 2008 addressed to Sime Darby Philipines. Securities and Exchange Commission. 485 U. addressed to Petron Corporation SEC OGC Opinion No. 224 (1988) SEC vs.S. addressed to Sycip Salazar Hernandez & Gatmaitan 6 .. Inc. G. G. Levinson. 56 – 61. Intreport Resources.1 Section 23 Transactions of Directors. No. vs. Morales pp. SRC Rule 18.3. Cemco Holdings.ph) for samples of disclosures made by publicly listed companies. 171815. 1996 SEC Opinion dated 01 March 1988. 183905. SRC Rule 20 SEC Form 20-IS Section 21 Fees for Tender Offers and Certain Proxy Solicitations Section 22 Internal Record Keeping and Accounting Controls SEC Memorandum Circular No. Effectivity SRC SRC Rule 19 SEC Opinion No. Decasa * Check the Philippine Stock Exchange website (www. 2008 GSIS vs. October 6.R. 58 and 59 of the Corporation Code Section 20 Proxy Solicitations. Mamerto Mondragon SEC Opinion No.R. Inc. No.R. Inc. 16-08 dated July 22.com. National Life Insurance Company of the Philippines.sec. 135808.
addressed to Felipe Valdez SEC Opinion dated 03 July 1990.SEC Opinion dated 17 October 1988.1(b) – 1 SRC Rule 24. addressed to Norberto Capistrano SEC Opinion dated 14 June 1995. to addressed to Cesar Arambulo SEC Opinion dated 13 November 1995. 2009 Chapter VII – Prohibitions on Fraud.3 Section 27 Insider’s Duty to Disclose When Trading Read concurring opinion of Justice Tinga in SEC vs. 135808. 16-07dated 13 August 2007 August 1. Lim.1(d) SRC Rule 24. addressed to Manny Custodio SEC Opinion dated 15 February 1990. G.1 Section 26 Fraudulent Transactions SRC Rule 26. SEC Opinion dated 28 October 1991. Manipulation and Insider Trading Section 23. Reyes SEC Opinion dated 15 July 1997 . addressed to F. SRC Section 24 Manipulation of Security Prices. 17-03 dated 30 April 2003 Sec Opinion No. addressed to F. De Vera & Vigilia Law Offices SEC Opinion dated 06 November 1989. 2009 – No Classes August 15. 2008 Section 58 Civil Liability for Fraud in Connection with Securities Transactions 7 . Victor Africa SEC Opinion dated 19 August 2002. addressed to Jose Cervantes SEC Opinion dated 10 July 1990. October 6. No.B. 67-03 dated 08 December 2003 SEC-OGC Opinion No. Telan.B. Devices and Practices SRC Rule 24. Reyes SEC Opinion No. Intreport. addressed to Federico Ylagan Jr.R.2-2 PSE New Rules on Short Selling dated 26 October 2007 (see PSE Website) Section 25 Regulation of Option Trading SRC Rule 25. addressed to Wilson Sy SEC Opinion dated 12 November 1990. addressed to Atty. SEC Opinion dated 09 September 1991. addressed to Del Rosario. addressed to David Sinangote Jr.
14. Dealers.R.2(d) Section 34 Segregation and Limitation of Functions of Members.1 SRC Rule 33. Rules on Over the Counter Markets SRC Rule 32. Adoption of Risk Based Capital Adequacy Requirement/Ratio for Brokers/Dealers SEC Memorandum Circular No. Salesmen and Associated Persons SRC Rule 29 Section 30 Transactions and Responsibility of Brokers and Dealers SRC Rule 30. 122857. 335-340. series of 2004.1 SRC Rule 28. series of 2001 (Broker-Director Rule) Nicolas vs.2 Section 33 Registration of Exchanges SRC Rule 33.2 (c) SRC Rule 33. dated 27 March 1998 (unlicensed brokers/fees) Chapter IX – Exchanges and Other Securities Trading Markets Section 32 Prohibition on Use of Unregistered Exchange. Decasa Chapter VIII – Regulation of Securities Market Professionals Section 28 Registration of Brokers.2 SEC Memorandum Circular No. Dealers Salesmen and Associated Persons SRC Rule 28. 12.2 Section 29 Revocation. series of 2006. 173 – 179. No. Brokers and Dealers 8 . Regulation of Over-the-Counter Markets SEC Memorandum Circular No.1 SRC Rule 30.Section 59 Civil Liability for Manipulation of Security Prices Section 60 Civil Liability with Respect to Commodity Futures Contracts and Pre-Need Plans Section 61 Civil Liability on Account of Insider Trading Section 62 Limitation of Actions Section 63 Amount of Damages to be Awarded Section 71 Validity of Contracts Readings: pp 152-206. G. Morales pp 62-87.1 SRC Rule 32. 16. Court of Appeals. Refusal or Suspension of Registration of Brokers.
9. 13. series of 2004 SEC Memorandum Circular No. Decasa August 22. 88 – 131. 16.5 SEC Memorandum Circular No. series of 2008 Guidelines on the Registration of All Outstanding Shares Prior to Listing PSE Disclosure Rules (2003) 9 . 6.1 SRC Rule 49.1 SEC Memorandum Circular No. 14. SEC Memorandum Circular No. series of 2009 Reading Materials: pp.4 SRC Rule 36. 9. series of 2004 Section 35 Additional Fees of Exchanges Section 36 Powers with Respect to Exchanges and Other Trading Markets SRC Rule 36. 206-268. series of 2009 SEC Memorandum Circular No.1 SRC Rule 49. Morales pp. series of 2002 Revised Code of Corporate Governance.SRC Rule 34. series of 2006 Rules Governing the Over the Counter Market Section 37 Registration of Innovative and Other Trading Markets Rules and Regulations on Alternative Trading System dated 4 March 2004 Section 38 Independent Directors SRC Rule 38 SEC Memorandum Circular No.2 SRC Rule 49. 13.3 SCR Rule 50 Listing Rules of the Philippine Stock Exchange (2004) Revised Rules on Listing by Introduction dated 23 March 2009 Rules on Backdoor Listing dated 21 September 2006 Delisting Rules dated 22 September 2004 SEC Memorandum Circular No. 2009 Chapter XI Acquisition and Transfer of Securities and Settlement of Transactions in Securities Chapter XII Margin and Credit Sections 41 – 50 of the SRC SRC Rule 42 SRC Rule 48.
9267 (Securitization Act) and Implementing Rules and Regulations Proposed legislation August 29. Introduce Fixed Income Exchange Introduce WESM August 22. as amended (SPAV Law) and Implementing Rules and Regulations Republic Act No. 2629 (Investment Companies Act) and ICA Rule 35-1 (Investment Company Rule) Republic Act No.com.*Check the newsroom www. 2009 Midterms 10 .ph for copies of the cited rules. 9182.pse. 2009 Investment House Law and the Omnibus Rules and Regulations for Investment Houses and Universal Banks Registered as Underwriters of Securities (2002) Republic Act No.
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