PHILIPPINES Law and Practice Contributed by: Francis L. Fragante and Jennifer Marie G. Castro, Cruz Marcelo & Tenefrancia
minimal public risk. The SEC may also exempt other transactions, if it finds that the requirement of registra - tion under the SRC is not necessary in the public inter - est or for the protection of the investors, for example because of the small amount involved or the limited character of the public offering. With regard to reporting requirements, issuers are required to file an annual report, quarterly report and current reports, as necessary, to make a full, fair and accurate disclosure to the public of every material fact or event that occurs, which would reasonably be expected to affect investors’ decisions in relation to those securities. Disclosure requirements are also required of beneficial ownership of 5% of any class of equity securities of a company satisfying the require - ments of Section 17.2 of the SRC. Further, the SRC provides the requirements relating to tender offers, including mandatory tender offers and FDI in the Philippines is subject to the nationality restrictions in the FIA and securities regulation under the SRC. Other than that, there is generally no require - ment for an investment to be reviewed or approved by any Philippine regulatory authority. 6. Antitrust/Competition 6.1 Applicable Regulator and Process Overview Merger control in the Philippines is governed by the PCA, which was enacted to enhance economic effi - ciency, promote free and fair competition, prevent economic concentration which will unduly stifle com - petition, lessen, manipulate or constrict the discipline of free markets, and penalise all forms of anti-com - petitive agreements, abuse of dominant position and anti-competitive mergers and acquisitions. The PCA introduces the pre-notification regime for mergers and acquisitions, which requires covered transactions to be notified to the PCC for its approval, namely those transactions that exceed both the size of transaction (SOT) and size of party (SOP) thresh - those exempt therefrom. 5.3 Investment Funds
olds, which are adjusted annually. Starting from 1 March 2025, mergers and acquisitions that exceed the parameters of size of party of PHP8.5 billion and size of transaction of PHP3.5 billion must be notified to the PCC before proceeding. Upon submission of the prescribed Notification Form, the PCC has 15 days to check the completeness of the submitted documents. Once confirmed, the PCC will conduct its Phase I review within 30 days from the date of confirmation (“Phase I Review”). Should the PCC determine that a more comprehensive or detailed analysis of the merger or acquisition is necessary, it shall conduct its Phase II Review for an additional 60 days. However, the total review period shall not exceed 90 days. To facilitate time-sensitive transac - tions, the PCC allows for an Expedited Merger Review. If a transaction falls below the SOP and SOT thresh - olds, the PCC may, motu propio, review transactions if it believes that the transaction is likely to substantially prevent, restrict or lessen competition in the relevant market. Parties to a transaction that is subject to compulsory notification must notify the PCC within 30 calendar days after the signing of definitive agreements relating to the merger but prior to any acts of consummation. If parties to a merger and their ultimate parent entity fail to notify the PCC or breach the waiting period before consummating the merger, the merger or acquisition is considered invalid and without legal effect. Further, the parties will be fined 1% to 5% of the transaction’s value. The PCA also prohibits anti-competitive conduct, such as anti-competitive agreements, and abuse of domi - nant position. In general, anti-competitive agreements are agreements that substantially prevent, restrict or lessen competition. These may be between competi - tors (horizontal agreements) or between and among enterprises in a production or distribution chain (verti - cal agreements) that prevent, distort or restrict com - petition in a territory. Examples include price fixing, output limitation, market sharing and bid rigging. On the other hand, abuse of dominant position occurs when an entity with a significant degree of power in
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