Definition of Qualified Buyers under Section 10 of the Securities Regulation Code

December 10, 2007 SEC MEMORANDUM CIRCULAR NO. 06-07 TO : All Concerned SUBJECT : Definition of Qualified Buyers Under Section 10 of the Securities Regulation C od e Pursuant to its authority under Section 10.1 (I) (vi) of the Securities Regulation Code, the Securities and Exchange Commission (the "Commission"), in its meeting on December 4, 2007, resolved to issue the following rules on the determination of a "qualified buyer." SECTION 1. A "qualified individual buyer" shall be a natural person who, at the time of his or her registration with a Self Regulatory Organization, or such other entities that the Commission may authorize to make the registration, possesses the following qualifications: a) Has a minimum annual gross income of Twenty Five Million Pesos (PhP25,000,000) for at least two years prior to registration; or a total portfolio investment in securities registered with the Commission of at least Ten Million Pesos (PhP10,000,000); or a personal net worth of not less than Thirty Million Pesos (PhP30,000,000); THCSAE AND b) Has been engaged in securities trading, in his personal capacity or through a fund manager, for a period of one year; or held for at least two years a position of responsibility in any professional or business entity that requires knowledge or expertise in securities trading, such as, legal consultant; financial adviser; sales person or associated person of a broker-dealer; or finance, treasury or trust officer of a bank or other executive positions with related responsibilities. SECTION 2. A juridical person shall be considered a "qualified institutional buyer" if it possesses any of the following qualifications at the time of its registration in the same manner described above: a) Has a minimum annual gross income of at least One Hundred Million Pesos (PhP100,000,000) for at least two years prior to registration; b) A total portfolio investment in securities registered with the Commission of at least Sixty Million Pesos (PhP60,000,000); CSaIAc c) A net worth of not less than One Hundred Million (PhP100,000,000). SECTION 3. All applications for registration as "qualified buyer" shall be accompanied by the following documents: a) Signed Information Sheet (see Annex 1 for Qualified Individual Buyers and Annex 2 for Qualified Institutional Buyers); b) Proof of the applicant's qualifications; and c) Copies of income tax returns for the preceding two years, as filed and stamped "received" by the Bureau of Internal Revenue; SECTION 4. The registration shall be valid for two years, provided, that any application for renewal should be accompanied by a favorable recommendation of the authorized registrar and shall be subject to the approval of the Commission. SECTION 5. The registry book of the authorized registrants shall at all times by open for review or inspection by the Commission. IDASHa SECTION 6. No securities purchased by "qualified buyers" shall be assigned, transferred or sold to non-qualified investors. SECTION 7. This Memorandum Circular shall take effect on January 15, 2008. December 10, 2007, Mandaluyong City, Metro Manila (SGD.) FE B.BARIN Chairperson ANNEX 1 INFORMATION SHEET FOR QUALIFIED INDIVIDUAL BUYERS Name _______________________________________________________________ Civil Status _________Single___________Married Home Address: ________________________________________________________ Office Address: ____________________T.I.N. No. _________SSS No. __________ Citizenship _______________________Telephone No. ___________________ Fax No. _______________________E-mail Address: ___________________ 1. Age: 2. Educational Attainment: ______College Degree:____________________________ ______Post Graduate Degree/Certificate: ________________ ______Others 3. Key objective/s for the investment being considered: ______To safeguard capital or amount invested CSIDTc ______To receive income by liquidating shares regularly ______To achieve a balance between income and capital growth ______To achieve capital appreciation or growth despite the potential for losses to obtain significant gains ______Others _____________________________________________ 4. Status of current portfolio investment: Amount ______ Savings/Time Deposit, Insurance and ___________ Pre-Need products ______ Government Securities (Treasury Bills, ___________ Fixed Rate Treasury Notes, Retail Bonds) ______ Corporate Bonds ___________ ______ Unit Investment Trust Funds ___________ ______ Mutual Funds ___________ ______ PSE Listed Stocks CEIHcT ___________ ______ Others________________________ ___________ 5. Current total portfolio of securities: _____at least P5 Million but not exceeding P10 Million _____more than P10 Million but not exceeding P20 Million _____more than P20 Million but not exceeding P50 Million _____more than P50 Million but not exceeding P60 Million EAHDac _____more than P60 Million but not exceeding P100 Million _____more than P100 Million but not exceeding P200 Million _____Others________________________________________ 6. Intended investment horizon: _____Short Term (one year or less) _____Medium Term (over one year to five years) _____Long Term (more than five years) _____Others_______________________________________ 7. Appetite for risk: _____ Low Risk : To earn a stable income, the investor accepts a fair amount of investment risk and fluctuations in the value of the principal amounts invested, such as, purely concentrated investments in fixed income and money market funds. DIECTc _____ Medium Risk : To achieve an above average return and capital growth, the investor accepts that there will be occasional periods of high fluctuations in the value of the principal amounts invested, such as, investment in equity and fixed income or money market funds. _____ High Risk : To achieve a high return on capital, the investor is prepared for a high degree of volatility and a high chance of losses to capital investments, such as, purely concentrated investments on equity funds, and if the investor is engaged in margin finance, is willing to inject additional capital if required to settle a margin call. _____ Others_____________________________________________ 8. Current net worth: _____at least P30 Million but not exceeding P50 Million _____more than P50 Million but not exceeding P100 Million _____more than P100 Million but not exceeding P200 Million _____Others__________________________________________ 9. Years of experience in trading in securities personally or through a fund manager: _____2 years _____3 years _____Others__________________ 10. Positions of responsibility held in a professional or business entity that requires knowledge or expertise in securities held for at least two years: _____Executive Position_______________________________ _____Legal Consultant IcHSCT _____Financial Advisor _____Sales Person or Associate Person of a broker-dealer _____Others________________________________________ I affirm that the foregoing information and representations are true and correct. ___________________________ Name and Signature of Applicant Date: ______________________ ANNEX 2 INFORMATION SHEET FOR QUALIFIED INSTITUTIONAL BUYERS Name of Corporation ______________________Date of Incorporation ___________ Principal Office _______________________________________________________ SEC Registration No. ______________________Telephone No. ________________ Fax No. _________________________________E-mail Address _______________ Authorized capital stock ________________________________________________ 1. Years of Existence _________ 2. Key objective/s for the investment being considered: ______To safeguard capital or amount invested ______To receive income by liquidating shares regularly ______To achieve a balance between income and capital growth ______To achieve capital appreciation or growth despite potential for losses to obtain significant gains ______Others____________________________________________ 3. Status of current portfolio investment: Amount ______ Savings/Time Deposit, Insurance and ____________ Pre-Need products ITScHa ______ Government Securities (Treasury Bills, ____________ Fixed Rate Treasury Notes, Retail Bonds) ______ Corporate Bonds ____________ ______ Unit Investment Trust Funds ____________ ______ Mutual Funds ____________ ______ PSE Listed Stocks ____________ ______ Others______________________ ____________ 4. Current total portfolio of securities: ___________________________ 5. Intended investment horizon: ______Short Term (one year or less) ______Medium Term (over one year to five years) ______Long Term (more than five years) CcAITa ______Others____________________________________________ 6. Appetite for risk: _____ Low Risk : To earn a stable income, the investor accepts a fair amount of investment risk and fluctuations in the value of the principal amounts invested, such as, purely concentrated investments in fixed income and money market funds. _____ Medium Risk : To achieve an above average return and capital growth, the investor accepts that there will be occasional periods of high fluctuations in the value of the principal amounts invested, such as, investment in equity and fixed income or money market funds. _____ High Risk : To achieve a high return on capital, the investor is prepared for a high degree of volatility and a high chance of losses to capital investments, such as, purely concentrated investments on equity funds, and if the investor is engaged in margin finance, is willing to inject additional capital if required to settle a margin call. _____Others____________________________________________ 7. Current net worth: ___________________ IcDESA We affirm that the foregoing information and representations are true and correct. __________________________________ Name of Applicant Institution __________________________________ Name and Signature of Authorized Officer Date: ____________________________