ACCLAW4 REVIEWER
- GR: Securities are prohibited to be
I. Securities Regulation Code (RA
8799)
a. State Policy
- To protect the investing public
through disclosure and minimizing
fraudulent activities
- SRC only applies to a public
company
- Public company: either publicly
listed company, or a company with
total assets of at least 50M pesos
with at least 200 shareholders each
holding 100 shares of the same
class.
- Blueskies Law
b. Def. of Securities
- Securities are SHARES,
PARTICIPATION, OR INTEREST
- Evidenced by CCI (contract, cert,
instrument)
- Includes of shares, bonds,
investment of contracts, etc.
- Other instruments as may in the
future be determined by the
commission (Catch all)
c. Investment Contracts
- contract, transaction, or scheme
involves money investment in a
common
-
-
- enterprise and is led to expect
profits from others’ efforts.
- Turner Test: makes an investment of
money, common enterprise, profits,
primarily from the efforts of others
d. Securities Market Participants (4)
- Issuer: creator
- Broker: middleman
- Dealer: buyer, for his own
- Prospectus: primer
e. Registration
sold or offered for sale or
distribution within the Philippines
- Except: Exempt securities, exempt
transactions
- SEC’s concern: merit and
requirements of full disclosure
- Exempt S: regis reqs not applied for
example security issued by the govt
(state is always solvent), when bank
issues securities of its own
- Exempt T: specific
 judicial sale
 sale of foreclosed securities
 isolated transactions
 stock dividends
 sale of shares
 issuance of bonds to a single
NOTE!!! All transactions involving
purchaser
securities which are offered to the
 right of conversion’
public, unless it is an exempt
 broker’s
security transactions
or an exempt transaction
subject to placements
 private the provisions of the SRC,
(sale to
needs to be registered as such with
fewer than 20 persons during
the Securities and Exchange
12-month
Commission period)
 pre-incorporation
 sale to qualified buyers
 SEC MAY EXEMPT OTHERS
f. Powers and Functions of the SEC
(too many but GIST is that it’s the
supreme body and it can do whatever)
g. Procedure for Securities Registration
- File at MAIN OFFICE
 “Voluntary Revocation”: SEC’s
consent on regis withdrawal
 - Signature
- Payment of Filing Fee
 Not more than 1/10 of 1% of the
max aggregate
- Publication
 Issuer shall submit affidavit of
publications
 2 newspaper, 2 weeks
- Order
 SEC has 45 days to decide
- Entry of Order
- Oath Taking of Issuer (wow
induction yern)
- Offer Period
 10 business days
- Termination
 3 business days
- Registration and Revocation (Issuer)
 Insolvent
 SRC provisions were violated
 Fraud engaged has been
engaging
 Misleading
 Shall include a foreign court
“competent judicial
administrative body”
h. Material Information
- Any happenings that are significant
to the entity
i. Prohibitions on Fraud, Manipulation,
and Insider Trading
- Basically, illicit acts that misleads
public’s trust
- Examples of Manipulative Practices
 Painting the Tape: fake activity,
movement in a security
 Marking the close: alter price
 Improper Matched Orders:
collusion
 Hype and Dump: from the term
itself
 Wash sale: active appearance
that stocks are actively traded
 Squeezing the Float: exploiting
shortages
j. Short Sales
- prohibited
- are any sale of a security which the seller does
not own or any sale which is consummated by
the delivery of a security borrowed by, or for
the account of the seller.
k. Insider Trading
l. Option Trading
- No member of an Exchange shall, directly or
indirectly, endorse or guarantee the performance
of any put, call, straddle, option or privilege in
relation to any security registered on a securities
exchange.
m. Fraudulent Transactions
n. material nonpublic
o. Protection of Investors
or II. Philippine Competition Act (RA 10667)
a. Definition
- Defines, prohibits, penalizes anti-
competitive actions
- Agreement: contract, arrangement,
understanding
- Confidential Business information:
indo on productions, operations,
sales
- Control: influence
- Dominant position: economic
strength
- Market: group of goods or services
b. Scope
- Basta engaged sa business
- International pero may effect sa PH
c. Power and Function of PH Competition
Commission
- NEDA
 - MADAMI basta gist is taga oversee interchangeable or substitutable by
d. Prohibited Acts the consumer or the customer, by
- Anti-competitive agreements reason of the goods and/or services’
 Prevent, restrict, or lessen characteristics, their prices and their
competition intended use
 Price fixing, bid rigging, output - The relevant geographic market
limitations, market-sharing: comprises the area in which the
restrict sales to specific geos entity concerned is involved in the
 OFFENSE: 100M – 250M , 2-7 supply and demand of goods and
YEARS services, in which the conditions of
- Abuse of Dominant position competition are sufficiently
 Predatory pricing homogenous and which can be
 Imposing barriers to entry distinguished from neighboring
 Discriminatory behavior areas because the conditions of
competition are different in those
 OFFENSE: 100M – 250M
areas.
- Prohibited mergers and conso
 Mergers and acquisitions that
substantially prevent, restrict
j. Determine Control or Dominance
or lessen competition in the
- The share of the entity in the
relevant market or in the market
relevant market and whether it is
for goods or services are
able to fix prices unilaterally or to
prohibited
restrict supply in the relevant
 OFFENSE: 100M – 250M
market;
e. Exceptions
- The existence of barriers to entry
- BENEFICIAL EFFECTS
and the elements which could
f. Compulsory Notifications
foreseeably alter both said barriers
- SIZE OF PARTY THRESHOLD:
and the supply from competitors;
6.1B
- The existence and power of its
- SIZE OF TRANSACTION
competitors;
THRESHOLD: 2.5B
- The possibility of access by its
g. Notifying entity
competitors or other entities to its
- 30 days if lampas 2.5B
sources of inputs;
h. Motu proprio – w/notif. PCC may
- The power of its customers to
review
switch to other goods or services;
i. Determining the Relevant Market
- Its recent conducts; and
- The Relevant Market refers to the
- Other criteria established by the
market in which a particular good or
regulation
service is sold and which is a
- 50%
combination of the relevant product
II. Financial Rehabilitation and
market and the relevant geographic
Insolvency Act RA 10142
market
- A relevant product market
a. Definition
comprises all those goods and/or
services which are regarded as
- (a) ensure or maintain certainty and
predictability in commercial affairs;
(b) preserve and maximize the value
of the assets of these debtors; (c)
recognize creditor rights; (d) respect
priority claims; and (e) ensure
equitable treatment of creditors who
are similarly situated
- If rehab is not kaya, state will
facilitate liquidation
b. Debtor
- Business organizations registered
with respective governing body
(INSOLVENT)
c. Individual Debtor
- Natural, resident, insolvent
d. Group of Debtors
- Corp related to each other
- Part more than 50%
- Single owned by same person
e. Insolvent
- Cant pay liabs
f. Liabilities
- Monetary Claims against debtors
g. Creditor
- refer to a natural or juridical person
which has a claim against the debtor
that rose on or before the
commencement date
 commencement date: court
issues commencement order
 Commencement order:
retroactive (appoints rehab
receiver, stay order, as actions
to enforce any judgment or
attachment or provisional
remedy against the debtor;
prohibits disposition or
encumbrance of property except
in the ordinary course of
business and prohibit debtor
from making any payment
except when authorized by the
rules)
h. Secured Creditor
- Creditors with secured claim
- Claim with liens
i. General unsecured creditor
- Claim is neither secured, preferred,
nor subordinated under the FRIA
j. Excluded Debtors
- Banks
- Pre-Need Companies
- Insurance Companies
- National and LGU
k. Debtors’ Remedies
- Suspension of payments (only indiv
debtor can) – for insolvent
individual. Is the debtor insolvent?
Yes procedure (filing for
declaration) court of the
province/city resided for 6 months at
RTC. Reqs (sched of debts and
liabilities) (inventory of assets)
(proposed agreement with ur
creditors)
l. Rehabilitation
- Restoration
- Through a petition
m. Rehabilitation Plan
- refers to a plan by which the
financial well-being and viability of
an insolvent debtor can be restored
using various means including but
not limited to debt forgiveness, debt
rescheduling, reorganization or
quasi-reorganization, dacion en
pago, debt-equity conversion and
sale of the business, or setting up of
a new business entity or other
similar arrangements as may be
approved by the court or creditors.
n. Cram down rule
o. Stay order
- suspends all actions and
proceedings, including the
enforcement of claims against the
debtor;
- suspends the enforcement of any
judgement and other remedies
against the debtor;
- prohibit the selling, encumbering,
transferring or disposing any of its
properties;
- Prohibit the debtor from making any
payment of its liabilities outstanding
“as of the commencement date”
p. What are suspended claims?
- NGU LGU claims
q. Manage
- Existing board/MNGMT
- Can be replaced
- Management com or rehab receiver
r. Court action on petition for
rehab
- Give
- Dismiss
- Convert to liquidation
s. Suspension Order
- 3 months, except scured creditors,
creditors having claim for personal
labor, maintenance and illness, 60
days prior
t. Liquidation Order
- Declaring that the debtor is
insolvent
- Ordering the liquidation of the
debtor
- In case of juridical person, declaring
it as dissolved
- Prohibiting payments and/or transfer
of property bybthe debtor; and
- Directing all claims to be filed with
the
- Distribution according to
Liquidation Plan
u. Concurrence of creditors
- Equal rights/ possession over the
same property
v. Preference of Credit
- Above others
w. Apply only where two or more
creditors have separate and
distinct  claims  against  the 
same  debtor  who  has  an
insufficient property 
x. Art 2336
- The debtor is liable with all his
property, present and future, for the
fulfillment of his obligations,
subject to the exemptions provided
by law
- Special 2241 (movable) 2242
- Ordinary preferred credits listed in
Article 2244 
- Common credits under Article 2245