Securities Regulation Code
Quiz
1. Which of the following is not a requisite of an investment contract?
a. It must involve an investment of money
b. The investment of money is made in a common enterprise
c. The investor must have an expectation of profits
d. The profit will be derived exclusively from the efforts of others
2. Which government agency governs the registration of securities?
a. Securities and Exchange Commission
b. Securities Registration Commission
c. Securities Regulatory Board
d. Securities Registration Board
3. It is a contract between a buyer and a seller whereby the buyer is obligated to take
delivery and the seller is obliged to deliver a fixed amount of an underlying commodity at
a pre-determined price and date.
a. Futures
b. Warrant
c. Forward
d. Options
4. Statement 1: If the issuer of securities has filed for a judicial declaration of insolvency,
then the SEC may revoke the registration of such securities.
Statement 2: If the issuer of securities has been convicted by final judgment of an offense
involving moral turpitude, then the SEC may revoke the registration of such securities.
a. Only Statement 1 is true.
b. Only Statement 2 is true.
c. Both statements are true.
d. Both statements are not true.
5. Which of the following is not required to be registered with the SEC under the SRRC?
a. Shares of stock
b. Voting trust certificates
c. Certificates of deposit
d. Contract of real estate mortgage
6. Which of the following is required to be registered with the SEC under the SRC?
a. Treasury bills
b. Bonds of the Government of Japan
c. Membership certificates in non-stock corporations
d. Bonds issued by banks
7. ABC Corporation is a close corporation. It applied for an increase in authorized share
capital on January 5,2021, which was approved by the Securities and Exchange
Commission. Pursuant to the increase, ABC Corporation issued 10,000 shares of stock
exclusively to its existing shareholders. No broker’s commission was paid in the
transaction. Is the transaction required to be registered under the SRC?
a. No. Because the sale is only exclusive to its own stockholders only.
b. Yes. Because the object of the sale is shares covered by the SRC.
c. Yes. Because no broker’s commission was paid.
d. No. Because the sale did not exceed 100,00 shares.
8. On the requirement to register securities under the SRC, which of the following is
generally an exempt transaction?
a. Pre-incorporation subscription
b. Reissuance of treasury shares
c. Flotation of bonds
d. Sale of shares with warrants
9. The deadline for the filing of the general information sheet is:
a. April 15 of the following year
b. 30 days following the date of the annual stockholder’s meeting
c. 60 days following the date stated in the by-laws of the corporation
d. 90 days following the date of the filing of the audited financial statements with the
SEC
10. A material non-public information includes:
a. Information that concerns the internal management of the entity issuing securities
b. Information involving market studies analyses
c. Information that will affect the price of the security
d. Information that constitutes falsity and manipulations
11. Who among the following is not an insider?
a. The issuer
b. Director of the issuer
c. Officer of a clearing agency
d. Relative within the fourth degree of consanguinity of the director of the issuer
12. Gryffindor Corporation is engaged in the manufacturing of smartphones. In the product
development stage is a top-secret smartphone which has four (4) back cameras,
waterproof, no bezel, 5G technology, and tested to withstand a drop from height of 100
feet. The Vice President for Research, Ginny, informed her husband, Neville, that such
phone is on the works and is nearing the finishing stage. Ginny intimated that the phone
will be a game-changer. Neville asks that Ginny email the details of the phone, which
Ginny did. After viewing the email, Neville went to the restroom and inadvertently left his
laptop and email open. Ron passed by Neville’s desk and saw the email. Curious, Ron read
the contents of the email and saw the planned development and launch of the
smartphone. Who is an insider?
a. Ginny only.
b. Ginny and Neville only.
c. Neville and Ron only.
d. Ginny, Neville, and Ron.
13. If there is a purchase or sale of a security of the issuer made by an insider or such insider’s
spouse or relatives by affinity or consanguinity within the 2 nd degree, legitimate or
common-law after such information came into existence, but prior to the dissemination
of such information to the public and the lapse of a reasonably time for the market to
absorb such information:
a. There is a presumption that the transaction is entered into fraudulently
b. There is a presumption that the transaction has been effected while in possession
of material non-public information
c. There is a presumption that the transaction requires a tender offer
d. There is a presumption that the transaction was entered into regularly
14. This is done by placing of purchase or sale order, at or near the close of the trading period
in order to affect the closing price likewise affecting the opening price of the following
day.
a. Securing the close
b. Drawing the open
c. Marking the close
d. Brining the open
15. In this transaction, a part or portion of the issue/security which is outstanding but
intentionally held by dealers or other person with a view of reselling them later for profit
thereby affecting supply of the security or its availability while demand remains the same
or increases, driving the prices up.
a. Squeezing the float
b. Painting the tape
c. Pushing the line
d. Washing the sink
16. Included in the application of the mandatory tender offer rule are corporations:
a. Having at least 200 shareholders who each have at least 200 shares
b. Having at least 100 shareholders who each have at least 200 shares
c. Having at least 200 shareholders who each have at least 100 shares
d. Having at least 100 shareholders who each have at least 100 shares
17. The mandatory tender offer applies to any person who intends to acquire shares of listed
corporations amounting to:
a. At least 20%
b. At least 25%
c. At least 30%
d. At least 35%
18. ABCDEF Corporation is 20% owned by A, 10% owned by B, 25% owned by C, and the
remainder are owned by the other stockholder. C plans to acquire all the shares of A and
B. Is the transaction covered by the mandatory tender offer rule assuming ABCDEF
Corporation have assets amounting to P75 million?
a. No, since the corporation is not a listed corporation.
b. No, since the purchase does not involve at least 30% of the corporation’s shares
c. Yes, since the purchase involves at least 30% of the corporation’s shares
d. Yes, since C will gain control of the corporation after the transaction.
19. Statement 1: Mergers and consolidations are not exempt from the mandatory tender
offer requirement if the threshold percentage of shares acquired is reached.
Statement 2: Purchases in connection with privatization undertaken by the government
are not exempt from the mandatory tender offer requirement if the threshold percentage
of shares acquired is reached.
a. Only Statement 1 is true.
b. Only Statement 2 is true.
c. Both statements are true.
d. Both statements are not true.
20. The process of tender offer involves:
a. Executing the deed of assignment of shares in public instrument
b. Sending letters of notices to each shareholder on record
c. Making an announcement in a newspaper of general circulation
d. Listing the shares with the local stock exchange
21. Within how many days after the date of filing shall SEC give an order delaring the
registration statement effective or rejected?
a. 30 days
b. 35 days
c. 40 days
d. 45 days
22. Which test determines whether a transaction qualifies as an investment contract?
a. Howey Test
b. Security Test
c. SEC Test
d. Investment Contract Test
23. The document made by or on behalf of an issuer, underwriter or dealer to sell or offer securities
for sale to the public through a registration statement filed with the Commission.
a. Registration Statement
b. Pre-need plans
c. Prospectus
d. Investment Contract
24. Securities are:
a. Shares, participation, or interest in a corporation or in a commercial enterprise or
profit-making venture and evidenced by a certificate, contract, instrument, whether
written or electronic character
b. A person’s interest in a corporation or other ventures that is represented by a
certificate
c. Fractional undiveded interests in oil, gas, or other minerals
d. All of the above
25. When is a tender offer mandatory?
a. Acquisition of at least 35% of equity shares in a public company within a period of 12
months
b. Acquisition of less than 35% of equity shares in a public company that would result in
the acquirer owning over 50% of the total outstanding equity securities of a company
c. both a & b
d. none of the above
