Category Archives: Corporate & Investments

Beneficial Ownership: Layers in Corporations must be Disclosed in the General Information Sheet (GIS)

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The Securities and Exchange Commission (SEC) has issued a directive, covering both stock and non-stock DOMESTIC corporations, that the beneficial ownership of corporations must be reflected in the General Information Sheet (GIS), which is one of the reportorial requirements that must be submitted every year. This requirement is contained SEC Memorandum Circular No. 17, series of 2018 (dated 27 November 2018), on the “Revision of the General Information Sheet (GIS) to Include Beneficial Ownership Information“. 

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Guidelines for Malls and Shopping Centers in GCQ Areas (DTI MC No. 20-21)

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Malls and shopping centers are allowed to open in areas under General Community Quarantine (GCQ). The Department of Trade and Industry (DTI) issued Memorandum Circular No. 20-21 dated 4 May 2020, or the “Guidelines on the Operations of Malls and Shopping Centers in Areas Declared Under General Community Quarantine (GCQ)“. The pertinent portions of the guidelines read:

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Unpaid Subscription, Delinquent Stocks and Delinquency Sale: Revised Corporation Code

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No shares of stock against which the corporation holds any unpaid claim shall be transferable in the books of the corporation (RCC, S62). Still, holders of subscribed shares not fully paid which are not delinquent shall have all the rights of a stockholder (RCC, S71). The stockholder loses the rights as a stockholder, except the right to receive dividends, only when the stock becomes delinquent. 

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Securities Borrowing and Lending (SBL) and Short Selling in the Philippines: Implementing Guidelines

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The SEC announced that in its en banc meeting on 17 December 2019, it approved the Implementing Guidelines on Securities Borrowing and Lending (SBL) and Short Selling issued by the PSE’s Capital Markets Integrity Corporation (CMIC). The Securities Regulation Code and the 2015 SRC Rules provide for the general regulations on short selling. The salient features of the Implementing Guidelines on SBL and short selling, which took effect on 25 February 2020, are as follows:

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Insider Trading in the Philippines: Prohibited under the Securities Regulation Code

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Insider trading is illegal in the Philippines. Section 27 of the Securities Regulation Code provides that: “It shall be unlawful for an insider to sell or buy a security of the issuer, while in possession of material information with respect to the issuer or the security that is not generally available to the public.” This, in essence, is the definition of insider trading. It has three elements: (1) the person must be an insider; (2) the insider sells or buys the security of the issuer; and (3) the insider is in possession of material nonpublic information with respect to the issuer or its security. These are discussed in seriatim below.

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Foreign Company Registration in the Philippines

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Foreign investors who wish to do business in the Philippines has two options in terms of registration. Non-Filipinos can either: (a) secure a license to do business as a foreign corporation in the Philippines; OR (b) register a foreign-owned corporation in the Philippines. A variant of option (b) is to invest in an existing Philippine company. 

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Private Workplace COVID-19 Prevention and Control: DTI and DOLE Joint Interim Guidelines

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The interim guidelines on workplace prevention and control of the Coronavirus Disease 2019 (COVID-19) for the private sector has been jointly issued by the Department of Trade and Industry (DTI) and Department of Labor and Employment (DOLE) on 30 April 2020. This is in accordance with the recommendation of the Inter-Agency Task Force on Emerging Infectious Diseases (IATF) for various government agencies to issue guidelines for the public and other stakeholders (see also 5-step guide for employers). The provisions of the interim guidelines are reproduced below.

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