Subject : Information Dissemination

March 30, 2004 SEC OPINION NO. 19-04 Subject : Information Dissemination Mr. Manuel M. Moraza Chairman URM, Inc. Suite 6A, Aboitiz Building 110 Legazpi Street, Legazpi Village, Makati City S i r : This has reference to your letter dated 22 January 2004 requesting information on any SEC rules or regulations requiring prior permits for investor information coordinating activities intended to be engaged in by URM, Inc. As alleged, URM, Inc. is a stock corporation duly registered under Philippine laws with SEC Certificate of Registration No. CS2002261667 with the following primary purpose: To act as managers or managing agents of persons, firms, associations, corporations, partnerships, and other entities, to provide management, investment and technical advice for commercial, industrial, manufacturing and other kinds of enterprises; and to undertake, carry on, assist or participate in the promotion, organization, management, liquidation or reorganization of corporations, partnerships and other entities, except the management of funds, securities, portfolio or similar assets of the managed entities or corporations. Subject corporation intends to offer its services as Investor Information Coordinators to various listed companies such as Petron Corp., Aboitiz Equity Ventures, Union Bank of the Philippines, PLDT and others. In the process, URM, Inc shall render said service jointly with its associate Georgeson Shareholder Communications. Its objectives are: to reach out to relatively small shareholders/investors who may possibly have been disenfranchised considering that they are situated in remote areas; reduce annual shareholder servicing costs; increase trading liquidity and assist shareholders in selling their holdings conveniently. Georgeson's role shall be the following: The proposed services shall consist of dissemination to the stockholder/investor of corporate information, mailing of information and the possible facilitation of selling their investments on a voluntary basis through regular registered brokers. In no case, shall the corporation engage in brokering functions for the small stockholders since it shall solely disseminate needed information from the issuer companies, brokers or other parties to the shareholders. The pivotal issue that is raised in this case relates to whether or not the proposed information dissemination activities by URM is legally feasible in this jurisdiction. The applicable rule in the instant case is Sec. 8.3 of the Amended Implementing Rules and Regulations of the Securities Regulation Code, the pertinent portion of which reads thus: Written Communication Not Deemed an Offer for Sale. A notice, circular, advertisement, letter, or other communication does not constitute an offer for sale in violation of Section 8 of the Code if it is published or transmitted to any person after a registration statement has been filed and contains any or all of the following information: A. the name of the issuer of the security; B. the full title of the security and the amount being offered; C. a brief indication of the general type of business of the issuer; D. the price of the security or, if the price is not known, the method of its determination or the probable price range as specified by the issuer or the managing underwriter; E. in the case of a debt security with a fixed (non contingent) interest provision, the yield or, if the yield is not known, the probable yield range, as specified by the issuer or the managing underwriter; F. the name and address of the sender of the communication and the fact that he is participating, or expects to participate, in the distribution of the security; G. the names of the underwriters; H. the approximate date upon which the proposed sale to the public is anticipated to commence; I. whether the security is being offered through rights issued to existing security holders, and, if so, the class of securities the holders of which will be entitled to subscribe, the subscription ratio, the actual or proposed record date, the date upon which the rights were issued or are expected to be issued, the actual or anticipated date upon which they will expire, and the approximate subscription price, or any of the foregoing; J. with respect to any class of debt securities, any class of convertible debt securities or any class of preferred stock, the security rating or ratings assigned to the class of securities by any credit rating agency recognized or accredited by the Commission and the name of such rating agency/ies which assigned such ratings. 2. Every communication, used pursuant to this Rule shall contain the following: A. If a registration statement has not yet become effective, the following statement in bold face prominent type: A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, BUT HAS YET BECOME EFFECTIVE. THESE SECURITIES MAY NOT BE SOLD NOR OFFERS TO BUY THE SAME BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS COMMUNICATION SHALL NOT CONSTITUTE AN OFFER TO SELL OR BE CONSIDERED A SOLICITATION OR AN OFFER TO BUY. B. A statement whether the security is being offered in connection with a distribution by the issuer or by a security holder, or both, and whether the issue represents new financing or refinancing or both; 2004cdtai C. The name/s and addresses of a person/s from whom a written prospectus, which accordingly meets the requirements of Section 12 of the Code, may be obtained. From the foregoing, it can be deduced that an ordinary information dissemination activity or other form of communication may not be treated as an offer for sale of securities contemplated under Sec 8 of the Securities Regulation Code. Considering that based on the representations of URM, Inc. that it will, in cooperation with Georgeson Shareholder Communications, merely engage in the dissemination of information from the issuer companies to its shareholders, the proposed activity may be allowed subject to the provisions of Section 8 of the Securities Regulation Code and its implementing rules and regulations. It must be understood, however, that pursuant to its further representation that it will not engage in brokering functions for the stockholders, URM, Inc. and/or its associate, Georgeson Shareholder Communications, shall in no case engage in any of the regulated activities of a broker-dealer for which a secondary license must be secured from the Commission, such as but not limited to: (1) receiving, holding or pooling of securities and/or cash of shareholders for and on their behalf, or for the account of URM, Inc. and/or Georgeson Shareholder Communications as trustee/agent of the shareholders; (2) soliciting authority from shareholders to buy/sell securities; (3) acting as a trustee or agent of brokers-dealers or shareholders for the purpose of selling/buying securities; (4) assisting or facilitating brokers-dealers or shareholders to buy/sell securities; (5) doing such other activities that may, in the future, be considered by the Commission or other government/regulatory agency as a regulated activity pursuant to pertinent laws, rules and regulations; and (6) receiving commissions from the shareholders and/or brokers-dealers or any other compensation arrangement as payment for the services rendered in connection with, but not limited to, nos. (1) to (5). aCHcIE Very truly yours, (SGD.) VERNETTE G. UMALI-PACO General Counsel