Philippine Competition Act (R.A. No.

10667) – LONG QUIZ (ANSWERS)

1. Which government regulatory body has original and primary jurisdiction over
the enforcement and implementation of the provision of Philippine Competition
Act (PCA)?

a. Philippine Competition Court

b. Philippine Competition Agency
c. Philippine Competition Commission
d. Philippine Competition Body

2. It refers to the market in which a particular good or service is sold.

a. Relevant Scheme
b. Relevant Market
c. Relevant Marketplace
d. Relevant Products

3. Which of the following is not a violation of merger or acquisition under PCA

law?

a. Transaction exceeded the threshold and no notification to the PCC.

b. Covered transaction was consummated after notification and within the
waiting period.
c. Notification of a covered transaction was duly made before the PCC.
d. Transaction did not breach the threshold but substantially lessened the
competition.

4. The PCC may conduct inquiry, investigate, and hear and decide on cases
involving any violation of the PCA and other existing competition laws by:

a. Motu proprio
b. Upon receipt of a verified complaint from an interested party
c. Upon referral by the concerned regulatory agency, and institute the
appropriate civil or criminal proceedings
d. All of the above

5. Which of the following triggers motu proprio review of the PCC?

a. An anonymous complaint alleging that consumers are adversely

affected by the conduct of an entity
b. Closure of a business holding a majority share in a relevant market
 c. Presence of an alleged anti-competitive conduct
d. All of the above

6. What is not a prohibited anti-competitive agreement?

a. Setting, limiting, or controlling production, markets, technical

development, or investment
b. Restricting competition as to price, or components thereof, or other terms
of trade
c. Dividing or sharing the market, whether by volume of sales or purchases,
territory, type of goods or services, buyers or sellers or any other means.
d. Participating in an auction or in any [putol ang screenshot]

7. For purposes of determining the relevant market, the following factors, among
others, affecting the substitutability among goods or services constituting such
market and the geographic area delineating the boundaries of the market shall
NOT be considered:

a. National, local or international restrictions which limit access by users or

consumers to alternate sources of supply or the access of suppliers
b. The cost of distribution of the good or service, its raw materials, its
supplements and substitutes from other areas and abroad, considering
freight, insurance, important duties and non-tariff restrictions; the
restrictions imposed by economic agents or by their associations; and the
time required to supply the market from those areas
c. The cost and probability of sellers or borrowers seeking other markets
d. The possibilities of substituting the goods or services in question, with others
of domestic or foreign origin, considering the technological possibilities,
extent to which substitutes are available to consumers and time required
for such [naputol ang screenshot]

8. It comprises an area in which the entity is involved in the supply and demand
of goods and services, in which the conditions of competition are
homogeneous which can be different from the condition of competition in the
neighboring are.

a. Relevant Environmental Market

b. Relevant Geographic Market
c. Relevant Topographical Market
d. Irrelevant Geographic Market
9. The merger or acquisition agreement that substantially prevent, restrict or
lessen competition in the relevant market is allowed under PCC law.

False

10. Parties to the merger or acquisition agreement wherein the value of the
transaction exceeds (2) billion pesos are prohibited from consummating their
agreement until 30 days before providing notification to the PCC.

False

Securities Regulation Code – LONG QUIZ (QUESTIONS, NO ANSWERS)

Suppose “A” is the owner of several inactive securities. To create an

appearance of active trading for such securities, “A” connives with “B” by which
“A” will offer for sale some of his securities and “B” will buy them at certain fixed
price, with the understanding that although there would be an apparent sale,
“A” will retain the beneficial ownership thereof.
Is the arrangement lawful?
o Yes. As long as the securities are registered then there is no prohibition on
the trading of the securities.
o No. the arrangement is not lawful. It is an artificial manipulation of the
price of securities.

Suppose “A” is the owner of several inactive securities. To create an

appearance of active trading for such securities, “A” connives with “B” by which
“A” will offer for sale some of his securities and “B” will buy them at certain fixed
price, with the understanding that although there would be an apparent sale,
“A” will retain the beneficial ownership thereof.
Assuming that the aforementioned situation is illegal, what is it called?
o Wash sale
o Hype and dump
o Marking the close
o Painting the tape
“Securities” issued to the public are required by law to be registered with –
o The Banko Sentral ng Pilipinas;
o The Philippine stock Exchange;
o The Securities and Exchange Commission;
o The Securities and Exchange Commission and the Philippine Stock
Exchange

The business scheme of Company A is that an investor will enroll under its
program, and the latter would be entitled to recruit other investors and receive
commissions from the investments of those directly recruited by him?
Is company A engaged in the sale of securities which must be registered?
o Yes, because there is a contract, scheme or transaction, that involves an
investment of money in a common enterprise, with the expectation of
profits, derived primarily from the efforts of others.

o Yes, because there is a contract, scheme or transaction, that involves an

investment of money in a common enterprise, with the expectation of
profits, derived solely from the efforts of others.

o No, because there is no scheme or transaction, that involves an

investment of money in a common enterprise, with the expectation of
profits, derived primarily from the efforts of others.

o No, because it is one of the exempt transactions/ exempt securities.

Company A sold computer software and hosted websites without providing
internet service. It devised a scheme in which a buyer could acquire from it an
internet website with 15-MB capacity. At the same time, by referring to
Company A his own down-line buyers, a first-time buyer could earn commissions,
interest in real estate and insurance coverage.
Is Company A’s scheme considered an investment contract which requires
registration?
o Yes, because there is a contract, scheme or transaction, that involves an
investment of money in a common enterprise, with the expectation of
profits, derived primarily from the efforts of others.

o Yes, because there is a contract, scheme or transaction, that involves an

investment of money in a common enterprise, with the expectation of
profits, derived solely from the efforts of others.

o No, because there is no scheme or transaction, that involves an

investment of money in a common enterprise, with the expectation of
profits, derived primarily from the efforts of others.

o No, because it is one of the exempt transactions/ exempt securities.

Philippine Palaces Realty (PPR) had been representing itself as a registered

broker of securities, duly authorized by the SEC.
On October 6, 1996, PPR sold to spouses Leon and Carina one timeshare of
Palacio del Boracay for US$7,500. However, its Registration Statement became
effective only on February 11, 1998 after the SEC issued a resolution declaring
that PPR was authorized to sell securities, including timeshares
On March 30, 1998, Leon and Carina wrote PPR rescinding their purchase
agreement and demanding the refund of the amount they paid, because the
Palacio del Boracay timeshare was sold to them by PPR without the requisite
license or authority from the SEC. PPR contended that the grant of the SEC
authority had the effect of ratifying the purchase agreement (with Leon and
Carina) of October 6, 1996.
Is the contention of PPR correct?
 o Yes. The contention of PPR is correct. It is settled that no securities shall be
sold or offered for sale or distribution in the Philippines without a
registration duly filed and approved by the Commission. Corporate
registration is one of the requirements under Section 9 of BP Blg. 178. Since
PPR has registered its securities, it is allowed to sell the same to Leon and
Carina. Furthermore, the SEC resolution had the effect of ratifying the
purchase agreement with Leon and Carina.

o No. The contention of PPR is not correct. It is settled that no securities shall
be sold or offered for sale or distribution in the Philippines without a
registration duly filed and approved by the Commission. Corporate
registration is one of the requirements under Section 9 of BP Blg. 178. As
the securities were sold prior to the SEC’s issuance of a resolution
declaring that PPR was authorized to sell securities, they had no authority
to sell at the time the securities were sold to Leon and Carina.

Able Corporation sold securities to 15 non-qualified buyers during a 12-month

period, without registering the securities with the Securities and Exchange
Commission. Did Able Corporation violate the Securities Regulation Code?
o Yes. Securities shall not be sold or offered for sale or distribution within the
Philippines, without a registration statement duly filed with and approved
by the Commission.
o Yes. The Securities are neither exempt securities nor are they exempt
transactions.
o No. It is an exempt transaction.
o No. It is an exempt security.

X, who is Executive VP of ABC Corporation, a listed company, can be held liable

or guilty of insider trading if, he –
o Bought shares of ABC Corporation when it was planning to acquire
another company to improve its asset base, the news of which increased
the price of the shares in the Stock Exchange.

o Bought shares of XYC Corporation, a sister company of ABC Corporation

when he learned that XYC Corporation was about to also list its share in
the Philippine Stock Exchange;
 o Bought shares of ZZZ Corporation when he learned that ABC Corporation
would acquire ZZZ Corporation;

o All of the statements are correct.

True or False
In all cases, Securities shall not be sold or offered for sale or distribution within the
Philippines, without a registration statement duly filed with and approved by the
Commission.
o True
o False

The Howey Test is relevant in cases wherein a person invests money in a

common enterprise and is led to expect profits solely from the efforts of others.
o True
o False