The Securities Regulation Code and its Implementing Rules and Regulations

Rule 8

1 Filing of Registration Statement 8.1.1. Filing of Registration Statement ("RS") and Effectivity of Offering 8.1.1.1. No securities shall be sold or offered for sale, or distributed by any person or entity within the Philippines unless such securities are duly registered with the Commission through Form 12-1, and the registration statement has been declared effective by the Commission except of a class exempt under Section 9 of the Code or unless sold in any transaction exempt under Section 10 thereof and these Rules. No information relating to an offering of securities shall be disseminated unless a registration statement has been filed with the Commission and the written communication proposed to be released contains the required information under SRC Rule 83. 8.1.1.2. All outstanding shares of the following corporations shall be registered with the Commission: 8.1.1.2.1. Corporations that will conduct Initial Public Offerings; 8.1.1.2.2. Corporations that will apply for listing on an Exchange by way of introduction. 8.1.1.3. No registration shall be required for the outstanding shares of reporting corporations with shares already listed on an Exchange that were not registered with the Commission pursuant to Section 5 (a) (3) of the Revised Securities Act, now Section 9.1 (e) of the Code. 8.1.1.4. If the securities subject of a registration statement are intended to be listed on an Exchange, a copy of the registration statement and all other pertinent documents, including any amendments, shall be filed with that Exchange. Two (2) copies of the application for listing shall also be filed with the Commission. 8.1.1.5. The sale of the securities subject of the registration statement shall commence within ten (10) business days from the date of the effectivity of the registration statement 1 and shall continue until the end of the offering period or until the sale is terminated by the Issuer. If the sale is not commenced within ten (10) business days, the RS shall be cancelled and all fees paid thereon forfeited. 8.1.1.6. A written notification of completion or termination of the offering shall be filed by the Issuer with the Commission within three (3) business days from such completion or termination, and the notice shall state the number of securities sold. 8.1.2. Delayed and Continuous Offering and Sale of Securities (Shelf Registration) Securities, which are intended to be issued in tranches at more than one instance after the registration statement has been rendered effective by the Commission, may be registered for an offering to be made on a continuous or delayed basis in the future, for a period not exceeding three (3) years from the effective date of the registration statement under which they are being offered and sold. Securities offered after the initial tranche shall comply with the following requirements: 8.1.2.1. At least five (5) business days prior to the offering or sale of the securities, it shall disclose to the Commission the required information using SEC Form 12-1-SR. 8.1.2.2. Filing Fees 8.1.2.2.1. Upon filing of an RS, the total filing fee shall be computed based on Section 12.5 (a) of the SRC, payable per tranche of issuance and proportional to the issued value. 8.1.2.2.2. The filing fees of the subsequent tranches shall be payable within seven (7) business days prior to commencement of the offer/sale of the said securities. 8.1.2.3. The registrant shall execute an Undertaking to pay the remaining registration fees no later than thirty (30) business days prior to the expiry of the three (3) year period reckoned from the date of effectivity of the RS. 8.1.3. Prospectus Delivery Requirements 8.1.3.1. The prospectus shall be submitted to the Commission as part of the registration statement. 8.1.3.2. Securities required to be registered pursuant to Sections 8 and 12 of the Code shall not be offered for sale or sold unless the prospectus, or any information material which has been filed with the registration statement in the form and containing the information described below, has been widely disseminated and sufficient copies have been made available to interested parties. Further, the prospectus contains the following statement in bold face print, at least 12 point type prominently displayed: A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, BUT HAS NOT YET BEEN DECLARED EFFECTIVE. NO OFFER TO BUY THE SECURITIES CAN BE ACCEPTED AND NO PART OF THE PURCHASE PRICE CAN BE RECEIVED UNTIL THE REGISTRATION STATEMENT HAS BECOME EFFECTIVE THEREBY, AND ANY SUCH OFFER MAY BE WITHDRAWN OR REVOKED, WITHOUT OBLIGATION OR COMMITMENT OF ANY KIND, AT ANY TIME PRIOR TO THE NOTICE OF ITS ACCEPTANCE. AN INDICATION OF INTEREST IN RESPONSE HERETO INVOLVES NO OBLIGATION OR COMMITMENT OF ANY KIND. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR BE CONSIDERED A SOLICITATION OF AN OFFER TO BUY. 8.1.3.3. In addition to the requirements of this Rule, the prospectus shall contain the information required by SRC Rule 12.1 and Form 12-1 and shall be prepared in accordance with the requirements of SRC Rule 72.1. The contents of the prospectus shall be worded in a language that can be understood by an ordinary person. 8.1.3.4. The prospectus is presumed to have been widely disseminated or circulated if copies were distributed initially and additional copies were furnished promptly, upon request, to the following: 8.1.3.4.1. All the participants in the distribution (e.g., underwriters and brokers); 8.1.3.4.2. The principal office of the Commission; 8.1.3.4.3. An Exchange, if the securities will be listed; and 8.1.3.4.4. Twenty (20) or more persons who are not qualified buyers under Section 10.1 (1) of the Code. 8.1.3.5. Notice of Availability of the Prospectus 8.1.3.5.1. All participants in the distribution of an offering of securities to the public shall, when inquiries are made about it, inform the interested parties about the availability of the prospectus and shall, if requested, provide them copies. 8.1.3.5.2. A notice shall be placed on the front cover of the subscription agreement distributed in connection with the offering informing interested persons that they are entitled to a copy of the prospectus if they so desire and how and where it can be obtained. 8.1.3.5.3. The information referred to in SRC Rules 8.1.3.5.1 and 8.1.3.5.2 above on where the prospectus may be obtained shall include the address of the principal office and email address of the Commission, the Exchange where the securities may be listed, the Issuer company, and the telephone number, address and email address of the Issuer's contact person. A statement shall also be made to the effect that the prospectus is available from all underwriters and brokers participating in the distribution. 8.1.3.6. The use of selling documents other than the prospectus during the offering period is prohibited, provided, that the information described in SRC Rule 8.3 may be disseminated in whole or in part to summarize the offering. 8.1.3.7. The prospectus shall not be used unless all the information it contains are up to date and accurately reflect the terms of the offering and the financial condition of the Issuer. Accordingly, until all appropriate amendments have been made and filed with the Commission under SRC Rule 14, the use of the prospectus and the right to sell and offer for sale may be suspended under Section 15 of the Code if any of the following events occurs: 8.1.3.7.1. There is a material change in any of the information provided (including, but not limited to, the occurrence of a material event that is required to be reported in Form 17-C); 8.1.3.7.2. The accompanying financial statements are more than two hundred twenty five (225) days old. 8.1.3.8. Format of the Prospectus 8.1.3.8.1. The information required in the prospectus shall follow the order of the items or other requirements in Part I of Form 12-l. The information should be complete and should not mislead its reader or render its contents incomprehensible. 8.1.3.8.2. All information in the prospectus should be properly captioned or labeled to indicate the subject matters covered. The information shall be divided into short paragraphs or sections, except the financial statements and tabular data. 8.1.3.8.3. The information in the prospectus shall not be condensed or summarized. References may be made to information in other parts of the prospectus instead of repeating them. 8.1.3.8.4. All information required to be included in the prospectus should be clearly understandable without the need to refer to Form 12-1 or to outside sources.

Rule 8

4 Register of Securities A record of the registration of securities shall be kept in a Register of Securities in which shall be recorded orders entered by the Commission with respect to such securities. Such register and all documents or information with respect to the securities registered therein shall be open to public inspection at reasonable hours on business days.

Rule 8

3 Written Communications Not Deemed Offers for Sale 8.3.1. A notice, circular, advertisement, letter or other forms of communication do not constitute an offer for sale that violates Section 8 of the Code if it is published or transmitted to any person after a registration statement has been filed and contains the following information: 8.3.1.1. The name of the issuer of the security; 8.3.1.2. The full title of the security and the amount being offered; 8.3.1.3. A brief indication of the general type of business of the issuer; 8.3.1.4. 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; 8.3.1.5. 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; 8.3.1.6. 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; 8.3.1.7. The names of the underwriters; 8.3.1.8. The approximate date upon which the proposed sale to the public is anticipated to commence; 8.3.1.9. 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; 8.3.1.10. 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 rating/s; 8.3.1.11. For preliminary prospectuses, the following statement in bold face: A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, BUT HAS NOT YET BECOME EFFECTIVE. THESE SECURITIES MAY NOT BE SOLD NOR OFFERS TO BUY THEM BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT IS RENDERED EFFECTIVE. THIS COMMUNICATION SHALL NOT CONSTITUTE AN OFFER TO SELL OR BE CONSIDERED A SOLICITATION TO BUY. 8.3.1.12. A statement whether the security is being offered in connection with a distribution by the Issuer or a security holder, or both, and whether the issue represents new financing or refinancing, or both; 8.3.1.13. The name/s and addresses of the person/s from whom a prospectus that meets the requirements of Section 12 of the Code may be obtained.

Rule 8

2 Conditional Approval The Commission may conditionally render the RS effective under such terms as it may deem necessary.

Rule 8

5 Audit by the Commission The Commission may audit the financial statements, assets and other information of a firm applying for registration of its securities whenever it deems the same necessary to insure full disclosure or to protect the interest of the investors and the public in general.

Rule 9

2 Other Exempt Securities 9.2.1. The Commission may, by rule or regulation after public hearing, add to the foregoing any class of securities if it finds that the enforcement of the Code with respect to such securities is not necessary in the public interest and for the protection of investors.

Rule 9

1 Exempt Securities 9.1.1. Any evidence of indebtedness issued by a financial institution that has been licensed by the BSP to engage in banking or quasi-banking shall be exempt from registration under Section 8.1 of the Code. 9.1.2. The registration requirements shall not likewise apply to the following: 9.1.2.1. Evidence of indebtedness issued to the BSP under its open market and/or rediscounting operations; 9.1.2.2. Bills of exchange arising from a bona fide sale of goods and services that are distributed and/or traded by banks or investment houses duly licensed by the Commission and BSP through an organized market that is operated under the rules approved by the Commission; 9.1.2.3. Any security issued or guaranteed by multilateral financial entities established through a treaty or any other binding agreement to which the Philippines is a party or subsequently becomes a member (hereinafter referred as Multilateral Financial Entities or MFE), e.g., international financial institutions, multilateral development banks, development finance institutions or any other similar entities; or by facilities or funds established, administered, and supported by MFEs; Provided, that the issuer shall file an offering circular/memorandum in a format prescribed by the Commission and containing among others; (1) information about the issuer and the security to be issued, (2) information about the MFE, and (3) information about the guarantee. 9.1.2.4. The registration requirements shall not likewise apply to evidence of indebtedness, e.g., commercial papers, that meet the following conditions: 9.1.2.4.1. Issued to not more than nineteen (19) non-institutional lenders; 9.1.2.4.2. Payable to a specific person; 9.1.2.4.3. Neither negotiable nor assignable and held on to maturity; and 9.1.2.4.4. In an amount not exceeding One Hundred Fifty Million Pesos (PhP150,000,000.00) or such higher amount as the Commission may prescribe. 9.13. Notwithstanding that a particular class of securities is exempt from registration, the conduct by any person in the purchase, sale, distribution of such securities, settlement and other post-trade activities shall comply with the provisions of the Code and the rules issued thereunder. Moreover, the purchase and sale of such security shall not be exempt from the coverage of the provisions of the Code on civil and other related liabilities, and other applicable provisions of the Code on fraud. 9.1.4. Consistent with public interest and for the protection of investors, the Commission, may require an Issuer of a class of securities exempted from registration, to make available to investors and file with the Commission periodic disclosures regarding the Issuer, its business operations, its financial condition, its governance principles and practices, its use of investor funds, and other appropriate matters, and may also provide for suspension and termination of such requirement with respect to such Issuer.

Rule 10

2 Limited Public Offerings and Other Exempt Transactions 10.2.1. The Commission may exempt other transactions, if it finds that the requirement of registration under the Code is not necessary in the public interest or for the protection of the investors such as by reason of the small amount involved or the limited character of the public offering. 10.2.2. For a public offering to be considered of limited character, the covered securities should be available only to the parties or persons named in the application for exemption for a specified period. 10.2.3. The following documents shall be submitted in support of an application for exemption under Section 10.2 of the Code: 10.2.3.1. Letter-request which shall contain the following information: 10.2.3.1.1. Registered name of the applicant; 10.2.3.1.2. Primary purpose of the applicant; 10.2.3.1.3. Number of option shares to be issued; 10.2.3.1.4. Corresponding position of the optionees or persons to whom the offer shall be made; 10.2.3.1.5. Latest audited financial statements of the applicant; 10.2.3.1.6. If applicable, the names and addresses of the applicant's subsidiaries and affiliate companies and their dates of registration with the Commission; issue price or exchange rate, including its source or basis, of the option shares at the time of filing; and last quoted price of the option shares and such other relevant features, terms and conditions of the plan. 10.2.3.2. Notarized certificate of the Corporate Secretary of the applicant Issuer attesting to the following: 2 10.2.3.2.1. Approval by the applicant's Board of Directors and required stockholders' approval of the stock offering plan ("the Plan"); 10.2.3.2.2. Genuineness and due execution of the Plan, a copy of which shall be attached to the certificate; and 10.2.3.2.3. If applicable, a breakdown of the number of shares earlier exempted from registration (citing SEC Resolution and date of approval), the shares subscribed by the optionees, and the remaining unissued shares computed on a year-to-year basis, and an explanation on why the applicant has renewed its application in spite of the availability of unissued shares. 10.2.3.2.4. A Certification of the Human Resource Head or any position of equivalent nature that the optionee-employees were given a copy of the Plan to enable them to make an intelligent judgment on the advantages and disadvantages of the Plan. 10.2.3.2.5. If the issuer is a foreign corporation, it should state whether the terms and conditions of the Plan in the Philippines are the same as that in other jurisdictions and an undertaking that the optionees of the plan will have continuous access on the key performance indicators of the company; 10.2.3.2.6. All documents executed abroad shall be in English and authenticated by the Philippine Embassy or Consulate where the documents were executed. 10.2.3.2.7. A listing of persons and their corresponding position(s) in whose favor such grant or issuance of options is to be made, indicating the number of shares to be given to each, or if this could not yet be ascertained, the formula to be used in determining such number of shares, and issue price. 10.2.4. Issuers, as well as the participating subsidiary, affiliate, branch office or any other entity-optionee, granted exemption under this Rule shall submit to the Commission, on or before the 10th of January of each year following the date of the grant until full issuance, a report containing the necessary details of the grant, such as but not limited to, the names of actual optionees and the number of shares subscribed by them, or such other reports and for such period as the Commission may from time to time require. 10.2.5. Applicants for exemption filed under this Rule shall pay a filing fee in such amount as may be prescribed by the Commission. The Corporate Secretary of the Issuer shall submit a sworn undertaking to pay the additional filing fee should there be an increase in price of the securities at the time of grant; 10.2.6. No securities sold under exempt transactions pursuant to Section 10.1 or granted exemption under Section 10.2 hereof shall be offered for sale or sold to the public without prior registration.

Rule 10

3 Application for Confirmation of Exemption 10.3.1. Any person applying or seeking for confirmation of an exemption under Section 10 of the Code shall file with the Commission a notice identifying the exemption relied upon on such form and at such time as the Commission by rule may prescribe and with such notice shall pay to the Commission a fee equivalent to one-tenth (1/10) of one percent (1%) of the maximum aggregate price or issued value of the securities. 11.1. No person shall offer, sell or enter into commodity futures contracts except in accordance with rules, regulations and orders the Commission may prescribe in the public interest. The Commission shall promulgate rules and regulations involving commodity futures contracts to protect investors to ensure the development of a fair and transparent commodities market.

Rule 10

1 Exempt Transactions 10.1.1. Disclosure to Investors Any person claiming exemption under Section 10.1 of the Code shall provide to any party to whom it offers or sells securities in reliance on such exemption a written disclosure containing the following information: 10.1.1.1. The specific provision of Section 10.1 of the Code on which the exemption from registration is claimed; and 10.1.1.2. The following statement in bold face: THE SECURITIES BEING OFFERED OR SOLD HEREIN HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES REGULATION CODE. ANY FUTURE OFFER OR SALE OF THE SECURITIES IS SUBJECT TO THE REGISTRATION REQUIREMENTS UNDER THE CODE UNLESS SUCH OFFER OR SALE QUALIFIES AS AN EXEMPT TRANSACTION. 10.1.2. Restrictions for Transactions under Section 10.1 (k) of the Code 10.1.2.1. Sections 8 and 12 of the Code are violated if (a) the number of persons holding the exempt security under Section 10.1 (k) exceeds nineteen (19) within a twelve (12) month period or (b) the sale, offer for sale, or distribution of a security, which is not exempt or which does not fall under an exempt transaction, is actively solicited from or marketed to non-qualified buyers in the Philippines by any entity, including its agents, representatives, employees or any person acting on its behalf. In proper cases, the issuer of the security and its directors and officers shall be held liable. 10.1.2.2. A prima facie presumption of circumvention of Sections 8 and 12 of the Code shall arise when the number of non-qualified investors shall exceed nineteen (19) within one (1) year. The issuer shall be liable for penalty in accordance with the Scale of Fines of the Commission, without prejudice to other actions which may be taken against the issuer. If the original purchaser/s shall resell said securities resulting in more than nineteen (19) holders, Sections 8 and 12 of the SRC shall apply, notwithstanding the exemption of their issuances, unless such succeeding sale shall qualify as an exempt transaction. 10.1.2.3. Debt instruments issued by companies without quasi-banking licenses in excess of One Hundred Fifty Million Pesos (PhP150,000,000) or such higher amount as the Commission may prescribe shall require prior approval by the Commission. 10.1.2.4. A confirmation of exemption made under Section 10.1 (k), shall be subject to the following terms and conditions: 10.1.2.4.1. The Issuer or seller claiming relief shall not engage in any form of general solicitation or advertising in that connection; 10.1.2.4.2. Securities sold in any such transaction may only be sold to persons purchasing for their own account; 10.1.2.4.3. The sale may be made to not more than nineteen (19) buyers. A corporation, partnership or other entity shall be counted as one buyer; Provided, that if the entity is organized for the specific purpose of acquiring the securities offered and is not a qualified buyer under Section 10.1 (1) of the Code, or under these rules, then each beneficial owner of equity securities in the entity shall be counted as a separate buyer under this Rule; 10.1.2.4.4. The issuer or seller provides any person to whom it offers for sale or sells securities the following information in writing: 10.1.2.4.4.1. Name of the issuer or seller and its or his predecessor, if any; 10.1.2.4.4.2. Address of its principal executive office; 10.1.2.4.4.3. Place of incorporation; 10.1.2.4.4.4. Title and class of the security; 10.1.2.4.4.5. Par or issue value of the security; 10.1.2.4.4.6. Number of shares or total amount of securities outstanding as of the end of the issuer's most recent fiscal year; 10.1.2.4.4.7. Name and address of the transfer agent; 10.1.2.4.4.8. Nature of the Issuer's business; 10.1.2.4.4.9. Nature of products or services offered; 10.1.2.4.4.10. Nature and extent of the Issuer's facilities; 10.1.2.4.4.11. Name of the chief executive officer and members of the board of directors; 10.1.2.4.4.12. The Issuer's most recent financial statement for the two preceding fiscal years or such shorter period of existence; 10.1.2.4.4.13. Whether the person offering or selling the securities is affiliated, directly or indirectly, with the Issuer; 10.1.2.4.4.14. Whether the offering is being made directly or indirectly on behalf of the Issuer, or any director, officer or person who owns directly or indirectly more than ten percent (10%) of the outstanding shares of any equity security of the Issuer and, if so, the name of such person; and 10.1.2.4.4.15. Information required under SRC Rule 10.1.1; Provided, however, that if the Issuer is a reporting company under Section 17 of the Code, a copy of its most recent annual report may be used to provide the required information. 10.1.3. Offer or Sale of Securities to Qualified Buyers under Section 10.1 (l) of the Code. Section 8 and 12 shall not likewise apply to securities issued and sold to the following qualified buyers: 10.1.3.1. Bank; 10.1.3.2. Registered investment house; 10.1.3.3. Insurance company; 10.1.3.4. Pension fund or retirement plan maintained by the Government of the Philippines or any political subdivision thereof or managed by a bank or other persons authorized by the BSP to engage in trust functions; 10.1.3.5. Investment company; or 10.1.3.6. Such other person as the Commission may by rule determine as qualified buyers, on the basis of such factors as financial sophistication, net worth, knowledge, and experience in financial and business matters, or amount of assets under management. 10.1.4. Issuance of evidence of indebtedness to primary institutional lenders Sections 8 and 12 shall not likewise apply to issuance of evidence of indebtedness to the following primary institutional lenders: banks, including their trust accounts wherein the bank-trustee is granted discretionary powers in the investment disposition of the trust funds, investment houses including their trust accounts wherein the investment house-trustee is granted discretionary powers in the investment disposition of the trust funds, trust companies, financing companies, investment companies, pre-need companies, non-stock savings and loan associations, building and loan associations, venture capital corporations, insurance companies, government financial institutions, pawnshops, pension and retirement funds approved by the BIR, educational assistance funds established by the national government, and other entities that may be classified as primary institutional lenders by the BSP, in consultation with the SEC; provided all such evidence of indebtedness shall only be negotiated or assigned to any of the aforementioned primary institutional lenders or the Development Bank of the Philippines with respect to private development banks in relation with their rediscounting privileges; provided further that in case of non-banks without underwriting licenses, such negotiation or assignment shall be through banks or non-banks licensed to be an underwriter or a securities dealer; provided finally, that in no case shall said instrument be negotiated or assigned to non-qualified investors. 10.1.5. Application for Confirmation or Declaration of Exemption 10.1.5.1. If the Issuer wants a confirmation of exemption under Section 10.1 of the Code, it shall file SEC Form 10-1 with the Commission. 10.1.5.2. In cases involving the distribution of securities through stock dividends, the Commission shall determine the sufficiency of the retained earnings of the Issuer prior to issuing a confirmation of exemption. 10.1.5.3. If the consideration for the offered securities is other than cash, except in the case of issuance of shares by way of stock dividends, a request for confirmation of exemption from registration shall be filed with the Company Registration and Monitoring Department of the Commission and shall be deemed to include an application for approval of valuation required under Section 62 of the Corporation Code and vice versa. 10.1.6. Exempt Commercial Paper Transactions An Issuer of commercial papers in an exempt transaction shall: 10.1.6.1. File a Notice or Application for Confirmation of Exemption (SEC Form 10-1) prior to issuance. The application shall make a disclosure of the following financial ratios: Current Assets Current Ratio = ———————— Current Liabilities Total Liabilities Debt to Equity Ratio = ———————— Stockholders' Equity 10.1.6.2. Indicate in bold letters on the face of the instrument the words: NON-NEGOTIABLE/NON-ASSIGNABLE 10.1.6.3. The Issuer of outstanding commercial papers shall also file the prescribed disclosure statement and pay the corresponding fee. 10.1.7. Isolated Transactions under Section 10.1 (c) 10.1.7.1. A request for confirmation of exemption under Section 10.1 (c) of the Code shall be available to issuers and sellers. 10.1.7.2. The Commission may take any action it may deem appropriate in an application for confirmation even if it is filed after the offer or sale of the securities without prejudice to the imposition of penalties if warranted. 10.1.8. Burden of Proof on the Availability of Exemption Unless a confirmation of exemption is issued under this Rule, any person claiming exemption under Section 10 of the Code has the burden of proof, if challenged, of showing that it is entitled to the exemption. The Commission may challenge such exemption any time. 10.1.9. Exempt from Registration, But Not from Other Requirements and Liabilities Notwithstanding that a particular class of securities issued under Section 10.1 is exempt from registration, the conduct by any person in the purchase, sale, distribution of such securities, settlement and other post-trade activities shall comply with the provisions of the Code and the rules issued thereunder. Moreover, the sale or offer for sale of a security in an exempt transaction under Section 10 of the Code shall not be exempt from civil liability and other related liabilities and other applicable provisions of the Code on fraud, among others. Consistent with public interest and for the protection of investors, the Commission, may require an Issuer of a class of securities falling under exempt transactions, to make available to investors and file with the Commission periodic disclosures regarding the Issuer, its business operations, its financial condition, its governance principles and practices, its use of investor funds, and other appropriate matters, and may also provide for suspension and termination of such requirement with respect to such Issuer. 10.1.10. Exemption Not Available for Scheme to Evade Compliance A request for confirmation of exemption under Section 10 of the Code shall not be available to any Issuer or other persons to any transaction or chain of transactions that, although it may appear to be in compliance with the Code and these Rules, is a part of a plan or scheme to evade compliance with the registration requirements of the Code. In such cases, registration shall be mandatory. 10.1.11. Qualified Buyers Under Section 10.1 (l)(vi) of the Code 10.1.11.1. For purposes of Section 10 of the Code, a natural person shall be considered a qualified individual buyer if he has registered as such with entities that are authorized by the Commission to act as registrar of qualified buyers pursuant to the rules provided under SRC Rule 39.1.4. A natural person must possess the following qualifications: 10.1.11.1.1. Has an annual gross income of at least Ten Million Pesos (Php10,000,000.00) at least two (2) years prior to registration, or a total portfolio investment in securities registered with the Commission of at least Ten Million Pesos (Php10,000,000.00), or a personal net worth of not less than Thirty Million Pesos (Php30,000,000.00); and 10.1.11.1.2. Has been engaged in securities trading personally or through a fund manager for a minimum period of one (1) year, or has held for at least two (2) years a position of responsibility in any professional 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, bank finance or treasury officer, trust officer or other similar executive officers. 10.1.11.2. If the buyer is a juridical person, it shall, at the time of registration with an authorized registrar, (i) have gross assets of at least One Hundred Million Pesos (Php100,000,000.00) or (ii) a total portfolio investment in securities registered with the Commission or financial instruments issued by the government of at least Sixty Million Pesos (Php60,000,000.00). 10.1.11.3. All persons registering as qualified buyers shall, in addition, show proof that they possess the above-enumerated qualifications and submit under oath certified copies of the documents or their equivalent that show the following matters: 10.1.10.3.1. Total portfolio of securities; 10.1.10.3.2. Annual gross income; 10.1.10.3.3. Their net worth; and 10.1.10.3.4. Threshold risk (low, medium, high risk). 10.1.11.4. The registration as qualified buyers shall be valid for 3 years if the qualifications provided for in 10.1.10.1 and 10.1.10.2 above are continuously complied with. Any application for renewal shall be subject to new evaluation by the registrar and accompanied by updated information sheets. For this purpose, the registrar shall maintain a registry book of qualified buyers that shall be open for inspection by the Commission.