Académique Documents
Professionnel Documents
Culture Documents
Securities transactions issuer transactions; trading transactions Why securities are regulated; blue sky laws
See:2
Sec. 2, Securities Regulation ode !R" #$%%& 'all v. (eiger)*ones o. 2+2 ,.S. -.% !1%1$& /eo0le v. Rosenthal, 1# /hil .2# !1%.%& 2. Regulatory 2ra3ework3 2.1. 2.2. 2... 2.+. 2.-. 2.1. 2.$. 2.8. 2.%. 2.1?. Securities Regulation ode !4SR 5&, R" #$%% 630le3enting Rules and Regulations o2 SR !4SR Rules5& /rior laws: Securities "ct ! " #. 71%.18; Revised Securities "ct !9/ 9lg 1$# 71%#28& /hili00ine Stock :;change !4/S:5& <isting Rules /S: =isclosure Rules Revised ode o2 or0orate (overnance 74 ( ode58 !S: >e3o ircular 1, series o2 2??%& /hili00ine @inancial Re0orting Standards !/@RS& S: (uidelines 2or the "ssess3ent o2 /er2or3ance o2 "udit o33ittees o2 o30anies <isted on the :;change !the 4(uidelines5& Aarious S: and /S: rules, regulations and 0olicies /ertinent rules on nationality !1%#. onstitution, @oreign 6nvest3ents "ct, S: and /S: regulations, etc.&
.. So3e i30ortant conce0ts in securities regulation ..1. ..2. .... ..+. ..-.
1
6ssuer SR Sec. ..2 /ublic co30any SR Rule ..1!>& 9ene2icial owner or bene2icial ownershi0 SR Rule ..1!"& See: S: v. 6nter0ort Resources, et al., -1$ S R" .-+ !Oct. 1, 2??#& ontrol Rule ..1!:& >aterial in2or3ation SR Rule ..1!6&; Rule 1+.1; /S: =isclosure Rules, Sec. +.. B +.+;
Co 0articular te;tbook is reDuired; however, students 3ay 2ind =iEon, Securities Regulation ode, 2?11, Re; /rinting, use2ul 2or basic discussions. 2 Fhe te;t o2 ,.S. cases cited in this outline 3ay be 2ound on the internet. Su33aries o2 several cases are in =iEon but students are encouraged to look at the te;t o2 the original 3 S: and /S: rules 3ay be obtained 2ro3 these agencies and are generally available on their res0ective websites.
2 ..1. ..$. ..#. ..%. Guali2ied 9uyer !6nstitutional investor& SR Rule 1?!<& Stock e;change SR Sec. ..$ 9rokers and dealers SR Sec. ...; ..+ 6nsider SR Sec. ..#
II. T"!es # securities 1. =e2inition and ty0es o2 securities ) SR Section ..1 !a& to !g&; SR ha0ter 1, 0ages 1)2# 1.1. 1.2. 1... 1.+. 1.-. 1.1. 1.$. Rules; =iEon,
Shares o2 stock, bonds, debentures, notes, evidences o2 indebtedness, asset) backed securities 6nvest3ent contracts, certi2icates o2 interest or 0artici0ation; certi2icates o2 de0osit 2or 2uture subscri0tion SR Rule ..1!(& @ractional undivided interests in oil, gas or other 3ineral rights =erivatives such as o0tions !0ut, call, straddle& and warrants SR Rule ..1!@& /ro0rietary, non)0ro0rietary 3e3bershi0 certi2icates !clubs, gol2 clubs, etc.& :vidences o2 indebtedness !0ro3issory notes, co33ercial 0a0ers, etc.& SR Rule ..1!R&!S& Other instru3ents as 3ay be deter3ined by the S: See: Reves v. :rnst B Houng, +%+ ,.S. -1 !1%%?& S: v. W. *. 'owey o., .2# ,.S. 2%. !1%+1& /ower 'o3es ,nli3ited v. S: , -+1 S R" -1$ !2??#& S: v. (lenn W. Furner :nter0rises, +$+ @.2d +$1 !1%$.& (abionEa v. ourt o2 "00eals, -1- S R" .% !2??#& S: v. Ioscot 6nter0lanetary 6nc., ,S ourt o2 "00eals, +%$ @ 2d -#$ !1%$+& S: v. <i2e /artners, 6nc., =. . ircuit, 1%%1, 1?2 @. .d -#$ !1%%1& /roctor B (a3ble v. 9ankers Frust, %2- @. Su00le3ent 12$? !1%%1& 6nternational 9rotherhood o2 Fea3sters v =aniel, +2% ,S --1 !1%$%& /eo0le v. 9alasa, 2%- S R" +% 71%%#8 S: O0inion dated 21 @ebruary 1%#+ re 3ulti)level 3arketing 6n the >atter o2 Octo0us Cetwork, 6nc., /:= !S: & ase %#)222?, 22 >ay 1%%#
1.
Registration 1.1. 1.2. 1... Registration SR Sec. #; Rule #.1 to #.. :;e30t securities SR Sec. %; Rule %.2 :;e30t transactions SR Sec. 1?; Rule 1?.1 See: Cestle /hili00ines v. ourt o2 "00eals and S: , 2?. S R" -?+ !1%%1& Rivilla v. 6nter3ediate "00ellate ourt, 1$- S R" $$. !1%#%& ,nion 9ank v. S: , .-# S R" +$% !2??1& Fi3bershare Realty or0. v. <ao and orteE, -++ S R" 2-+ !2??#& S: O0inions: (See i!on, Cha"ter #$ 1 @ebruary 1%%1 to >r. *orge Huson
3 11 @ebruary 1%%1 to "ir <iDuids "sian >anage3ent $ Cove3ber 1%%-, to "tty. Roberto O. /arel .? >arch 2??+ to >r. >anuel >orato 1.+. 1.-. 1.1. 1.$. 1.#. 1.%. o33odities 2utures contract SR Sec. 11 /rocedure 2or registration SR Sec. 12 Registration State3ent and /ros0ectus ) SR Sec. ..12; SR ReJection and revocation o2 RS SR Sec. 1. "3end3ents to RS SR Sec. 1+ Sus0ension o2 registration SR Sec. 1%rou" Re"ort 1: 2. <isting o2 securities+ 2.1. 2.2. 2... 2.+. Why listing is necessary See: /hili00ine Stock :;change v. ourt o2 "00eals, 2#1 S R" 2.2 !1%%$& (eneral obJectives and 0rinci0les ) "rt. 6, /art ", /S: <isting Rules Fhe Suitability Rule "rt. 6, /art 9, /S: <isting Rules (eneral reDuire3ents ) "rt. 666, /art ", /S: <isting Rules !a& ,nderwriter de2inition; duties; due diligence !b& Frans2er agent de2inition; duties and obligations !c& 6ssue >anager !d& @ull disclosure !e& @ull 0ay3ent o2 shares !2& >ini3u3 nu3ber o2 directors !g& O22ering 0rice !h& O22ering 0ros0ectus; red herring 0ros0ectus !i& <odg3ent o2 shares !J& <ock)u0 o2 shares , /S: <isting Rules
Sec. ..11
/ri3ary o22ering !initial 0ublic o22ering or 6/O& Secondary o22ering <isting by way o2 introduction
+. @irst 9oard listing "rt. 666. /art =, /S: <isting Rules -. Shares issued 0ursuant to rights o22ering; stock dividends %rou" Re"ort &: Re0ort on 2 to -, inclusive !<isting&
1. S0ecial rules 2or co30anies engaged in 3ining; 0etroleu3 and renewable energy !i& /hili00ine >ineral Re0orting ode 2or Re0orting o2 :;0loration Results, >ineral Resources and Ore Reserves ) >ain 0rinci0les: "rt. 66!+&: trans0arency, 3ateriality; co30etence ) =e2inition o2 o30etent /erson, "rt. 666!1?&
4 /S: Rule ) Su00le3ental <isting and =isclosure ReDuire3ents 2or /etroleu3 and renewable energy co30anies $. >ini3u3 /ublic Ownershi0 !>/O& rule #. Fa;ation o2 shares listed and traded on the /S: Sec. 12$, C6R (rou0 Re0orts: #: (: 5: 0: 'oreign ownershi" rules )ac*door listing +a,ation and the -inimum .ublic /wnershi" Rule .-RC1 rules on disclosure for "etroleum com"anies1 Shariah !ii&
I%. $egulati n # !re-need !lans SR Sec. 11 Su0ervision and regulation trans2erred to 6nsurance o33ission !R" %#2%& %. $e! rt rial re&uirements 1. Who are subJect to re0ortorial reDuire3ents SR Sec. 1$.2; 1#; 2. 2. Fy0es o2 re0orts ) SR Sec. 1$; Rule 1$ !a& 1$)" re0ort !"nnual Re0ort&; Rule 1$.1!2&!"&!1& !b& 1$)G re0ort !Guarterly Re0ort; Rule 1$.1!2&!"&!2& !c& 1$) re0ort ! urrent re0ort; what 3ust be re0orted see .7i8 o2 this outline !d& 1$)< re0ort !re0ort on inability to 2ile& !e& 1#)" re0ort ) bene2icial owners o2 -K or 3ore !SR Sec. 1#; Rule 1#& !2& 2." and 2.9 re0orts ) directors, o22icers, bene2icial owners o2 1?K or 3ore .. =isclosure !a& 9asic 0rinci0le /rea3ble, SR ; /S: =isclosure Rules, Sec. 1 !b& >aterial in2or3ation; 3aterial non)0ublic in2or3ation ) Rule ..1!6&; /S: =isclosure Rules, Sec. +, +.1, +.2, +.., +.+; Sec. 2$.2, SR !c& 'ow disclosure is 3ade !i& Fo the S: !ii& Fo the /S: Odisy syste3 !iii& Fo the 0ublic See: S: v. 6nter0ort Resources or0oration, et al., -1$ S R" .-+ !Oct. 1, 2??#&. 9asic v. <evinson, +#- ,.S. 22+ !1%##& Rivilla v. 6nter3ediate "00ellate ourt , 1$- S R" $$. !1%#%& ,nion 9ank v. S: , .-# S R" +$% !2??1&
%I. 'r tecti n # s(are( lder interests 1. Fender O22ers SR Sec. 1%; Rule 1% See: :> O v. Cational <i2e, -2% S R" .-- !2??$& !a& =e2inition !b& Rationale !c& >andatory tender o22ers !Rule 1%.27"87987 87=8& !d& :;e30tions 2ro3 3andatory tender o22er !Rule 1%..7"8798&
5 !e& 9uy back o2 shares Rule 1%.+7"8 to 7:8 !2& @iling and other reDuire3ents Rule 1%.1 et seD. 2. /ro;y solicitation SR Sec. 2?; Rule 2? !a& 6n2or3ation State3ent !@or3 2?)6S& !b& @or3 o2 0ro;y Rule 2?.!c& =istribution to shareholders %rou" Re"ort 2: 3nformation Statement and "ro,4 solicitation Sec. 2.
.. Fransactions o2 =irectors, O22icers and 0rinci0al stockholders SR !a& Re0orting reDuire3ents !i& SR Sec. 2..1 !ii& /S: =isclosure rules Sec. 1..1, 1..2 !b& Short swing 0ro2its; short sales ) SR See: S3olowe v. =elendo %rou" Re"ort 8: Sec. 2..2; 2...; 2..+
%II. )raud* mani!ulati n* insider trading %rou" Re"ort 5: -ani"ulative devices and "ractices 6 SRC Sec.&(.1
1. >ani0ulative devices and 0ractices !a& reating 2alse or 3isleading a00earance o2 active trading ) SR Sec. 2+.1!a& !b& Series o2 transactions intended to raiseLde0ress 0rices SR Sec.2+.1!b& !i& 43aking the close5 !ii& 40ainting the ta0e5 !iii& 4sDueeEing the 2loat5 !iv& 4hy0e and du305 !v& 4boiler roo3 o0erations5 !c& =isse3ination o2 2alse or 3isleading in2or3ation SR Sec. 2+.1!c& !d& @alse or 3isleading state3ents with res0ect to 3aterial 2acts SR 2+.1!d& !e& @i;ing, 0egging or stabiliEing the 0rice o2 securities SR Sec. 2+.1!e& See: S: 2. 6nsider trading !a& Who is an insiderM ) SR Sec. ..# !b& What constitutes 3aterial in2or3ationM See Sec. A!.& o2 this outline Rule ..1!6&; Rule 1+.1; /S: =isclosure Rules, Sec. +.. B +.+; Sec. 2$.2, SR !c& 6nsiderNs duty to disclose when trading SR Sec. 2$; /S: =isclosure Rules 1..1, 1..2 See: S: v. 6nter0ort Resources et al., -1$ S R" .-+ !Oct. 1, 2??#& v. ourt o2 "00eals, 2+1 S R" $.# !1%%-&
6 ,nion 9ank v. S: , .-# S R" +$% !2??1& %III. Inde!endent direct rs 1. 2. .. +. =e2inition SR Sec. .#; SR Rule .#.2 ) .#.-; ( ode "rt. 1!e&; Guali2ications and disDuali2ications SR Rule .#.1; 7cooling off "eriod8 ReDuire3ent 2or inde0endent directors SR Sec. .# Co3ination and election S: >e3o ircular 11, Series o2 2??2
I+. ,ncerti#icated securities See: SR Sections +.; +..1; +..2, +...; SR Sec. ++ %rou" Re"ort 19: :ncertificated shares and scri"less trading
1. Rationale 2or uncerti2icated securities 2. 'ow scri0less trading works .. Frans2ers o2 uncerti2icated shares; evidentiary value )records o2 securities inter3ediaries SR Sec. +...; SR Sec. ++ +. oncerns re scri0less trading and the need 2or a direct registry syste3 !a& /ro;y solicitation and cor0orate actions !b& /revention o2 2raud +. Sel#-regulat r" rgani-ati ns 1. Fhe /hili00ine Stock :;change SR Sec. .. to Sec. .$ 2. Others brokers and dealers; trans2er agents; custodians; etc. SR +I. . r! rate / vernance the 4(ood 'ousekee0ing Seal5 1. 2. .. +. -. 1. $. =e2inition ( ode "rticle 1!a& Who are covered by the (overnance ode See 0rea3ble to ( ode Why cor0orate governance is essential (;nron$ /rinci0les See O: = or0orate (overnance /rinci0lesor0orate (overnance best 0ractices See /S: or0orate (overnance (uidelines1 :ssential 9oard co33ittees See ( ode; see also S: >e3o ircular + !2?12& "nnual or0orate (overnance Re0ort !" (R& S: website Sec. .%.1
+II. S!ecial Acc unting rules 1. SR Sec. 1#; Rule 1#; /hili00ine @inancial Re0orting Standards !/@RS& +he -ar* to -ar*et rule
5 6
+III. Lia0ilities # r vi lati n # S$. 1. ivil liability SR Sec. -$ to 1., inclusive 2. "d3inistrative and cri3inal liabilities SR Sec. -1 to --, inclusive +I%. T(e Securities and 12c(ange . mmissi n 3S1.4 Sec. -.1!a& to -.1!n&; SR Sec. -.2; SR Sec. -. to -..+
See: :> O v. Cational <i2e, -2% S R" .-- !2??$& S: v. 6nter0ort Resources or0oration, et al., -1$ S R" .-+ !2??#& (S6S v. ourt o2 "00eals -#- S R" 1$% !2??%& /"SFR" v. ourt o2 "00eals, -.1 S R" 11 !2??$& /hili00ine Stock :;change v. ourt o2 "00eals, 2#1 S R" 2.2 !1%%$& 2. o30osition; Duali2ications o2 hair3an and o33issioners; ter3 o2 o22ice; chie2 e;ecutive o22icer; salaries; 3eetings; authority to delegate SR Sections +.1 to +. to the RF
See S0eed =istribution, 6nc. v ourt o2 "00eals, +2- S R" 1%1 !2??+& 6ntestate :state o2 "le;ander Fy v. ourt o2 "00eals, .-1 S R" 111 !2??1& "ndres et al v. uevas et al., +1? S R" .# !2??-& alleJa v. /anday, +#. S R" 1#? !2??1& Orendain v. 9@ 'o3es, -?1 S R" .+% !2??1& HuJuico et al. v. Guia3bao, et al., -1. S R" 2+. !*anuary 2%, 2??$& 9aviera v. /aglinawan, -1- S R" 1$? !2??$& onsuelo >etal or0oration v. /lanters 9ank, --- S R" +1- !2??#& S: v. 6nter0ort Resources or0oration, et al., -1$ S R" .-+ !2??#& +. 6nde3ni2ication and res0onsibilities o2 o33issioners SR Sec. 1