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Point of Law

The following articles were written by Francisco Ed. Lim and also published in The Philippine Daily Inquirer.

June 25, 2015

(First of 3 parts) Before Congress went into recess about two weeks ago, the Senate and the House of Representatives ratified the bicameral conference committee version of a new antitrust law, to be officially known as the Philippine Competition Act (PCA), for the country.   The bill is expected to be signed by President Aquino before his State of the Nation Address (Sona) in July... Read More

June 15, 2015

On April 15, 2015, the Department of Finance issued Order No. 054-2015 (DO), prescribing a fit-and-proper rule for independent directors of publicly listed and insurance companies. The DO sets an ideal term limit for independent directors, based on the “5-2-5” rule. This rule provides for a term limit of five years, followed by a cooling period of two years, and a final term of another five... Read More

May 28, 2015

More than three weeks ago, Evangeline “Vangie” Escobillo, who served as Insurance Commissioner from 2005 to 2007, was killed in a vehicular accident together with her husband, Retired Major General Nestor Sadiarin. I don’t profess to know Vangie personally and her personal life was none of my business. My dealings with her were purely professional. I first had the opportunity to work with her... Read More

April 24, 2015

Right after the Holy Week, 20 banks filed a petition with the Regional Trial Court of Makati to declare null and void Revenue Regulation 4-2011 (RR). The RR mandates, among others, the allocation of common expenses incurred by a bank’s regular banking unit among its tax-exempt income, tax-paid income and income subject to ordinary income tax. Deductibility of these expenses is determined by the... Read More

April 17, 2015

Do self-regulatory organizations like the Philippine Stock Exchange and Philippine Dealing Exchange Corp. have the power to impose monetary damages (like actual, punitive or damages) on entities or persons under their regulatory jurisdiction? A self-regulatory organization (SRO) is an organization or association registered under the Securities Regulation Code that is empowered to make and... Read More

March 19, 2015

One frequently discussed issue in securities regulation is the duty to correct and the duty to update information made available to the investing public. An issuer’s failure to correct or update a misleading statement may, under appropriate circumstances, constitute a “device, scheme, or artifice to defraud” or an act which “operates or would operate as a fraud or deceit upon any person” as to... Read More

March 05, 2015

Does FRIA cover banks, financial institutions? The Financial Rehabilitation and Insolvency Act of 2010 (FRIA) is the new law. It replaces the 1909 Insolvency Act. The new law contains three main parts. The first is rehabilitation, whose purpose is to restore the financial health of insolvent debtors. The second is liquidation, which provides for the orderly liquidation of the debtor’s assets... Read More

January 08, 2015

What is the buried facts doctrine in securities regulation? This basically states that a disclosure is insufficient if it is presented in a way that conceals or obscures the information sought to be disclosed. The doctrine applies when the fact in question is buried in a voluminous document or disclosed in a piecemeal fashion, preventing a reasonable investor from realizing the correlation and... Read More

December 25, 2014

What is the fraud-on-the-market theory in stock market transactions? This was the subject of a lengthy discourse in the case of Basic Incorporated vs. Levinson, 485 U.S. 224 (1988). Briefly, sometime in 1977 and 1978, Combustion Engineering, Inc. engaged in merger negotiations with some directors and officers of Basic Inc., a company listed on the New York Stock Exchange (NYSE). In the course... Read More

November 27, 2014

Earlier this month, the Shareholders’ Association of the Philippines, now popularly known as SharePHIL, conducted its annual general membership meeting. The occasion was graced no less than by BSP Governor Amando Tetangco Jr., who graciously shared with us BSP’s investor education program, a topic that is close to the heart of our young organization. Our mantra is shareholder empowerment through... Read More

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