Concept of Beneficial Owner under the Securities Regulation Code

Beneficial owner or beneficial ownership means any person who, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has or shares voting power (which includes the power to vote or direct the voting of such security) and/or investment returns or power (which includes the power to dispose of, or direct the disposition of such security); provided, that a person shall be deemed to have an indirect beneficial ownership interest in any security which is: 

1. held by members of his immediate family sharing the same household; 

2. held by a partnership in which he is a general partner; 

3. held by a corporation in which he is a controlling shareholder; or 

4. subject to any contract, arrangement or understanding which gives him voting power or investment power with respect to such securities; provided, that the following persons or institutions shall not be deemed to be beneficial owners of securities held by them for the benefit of third parties or in customer or fiduciary accounts in the ordinary course of business, as long as such shares were acquired by such persons or institutions without the definite and/or clear intention of effecting a change or influencing the control of the Issuer: 

  • i. A broker dealer; 
  • ii. An investment house registered under the Investment Houses Law; 
  • iii. A bank authorized to operate by the Bangko Sentral ng Pilipinas (“BSP”);
  • iv. A duly-registered insurance company; 
  • v. An investment company registered under the Investment Company Act; 
  • vi. A pension plan registered with and regulated by the Bureau of Internal Revenue, Insurance Commission or any other regulatory authority; and 
  • vii. An entity whose members are the persons specified above. 

All securities of the same class that are beneficially owned by a person, regardless of the form of the beneficial ownership, shall be aggregated in calculating the number of shares that shall be considered as beneficially owned by such person. 

A person shall be deemed to be the beneficial owner of a security if that person has the right to acquire beneficial ownership within thirty (30) days from the exercise of any option, warrant or right, or conversion of any security; or pursuant to the power to revoke a trust, discretionary account or similar arrangement; or pursuant to the automatic termination of a trust, discretionary account or similar arrangement. 

Atty.Fred

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