MIDTERM EXAMINATION

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MIDTERM EXAM

Define the following REIT terms. (Use all kinds of academic references):
1) Parent
2)
Principal Stockholder
3) Public Shareholder
4) Adviser
5) Affiliate and Associate
6)
Deposited Property
7) Constitutive Documents
8) Exchange
9) Material Contract
10)
Synthetic Investment Products (20pts.)

TYPE: ESSAY

Score: 20pts.

Your Answer: check

1) Parent- means a corporation which has control over another corporation, directly or
indirectly, through one or more intermediaries.
2) Principal Stockholder- means a
stockholder who is, directly or indirectly, the beneficial owner of more than ten percent
(10%) of any class of Investor Securities of the REIT.
3) Public Shareholder- means a
shareholder of a REIT other than the following persons (non-public shareholders):
i. The
Sponsor/Promoter of the REIT;
ii. A director, Principal Officer or Principal Stockholder of
the Sponsor/Promoter of the REIT;
iii. A director, Principal Officer or Principal Stockholder
of the REIT;
iv. An associate of a director, Principal Officer or Principal Stockholder of the
REIT or its Sponsor/Promoter;
v. A Related Corporation to the REIT or its
Sponsor/Promoter; and
vi. Any person who holds legal title to the shares of stock of the REIT
for the benefit of another for the purpose of circumventing the provisions of this Act.
4)
Adviser- means a lawyer, accountant, auditor, financial or business consultant, and such
other persons rendering professional advisory services to REIT.
5) *Affiliate- means a
corporation that directly or indirectly, through one or more intermediaries, is controlled by,
or is under the common control of, another corporation, which thereby becomes its parent
corporation.
*Associate- of a person includes:
i. Any relative of such person within the fourth
(4th) degree of consanguinity or affinity; and
ii. Any company in which he/she and his/her
relative within the fourth (4th) degree of consanguinity or affinity, directly or indirectly, has
an interest of twenty-five percent (25%) or more.
6) Deposited Property- means the total
value of the REIT's assets reflecting the fair market value of the total assets held by the REIT.
7) Constitutive Documents- means the Articles of Incorporation and By-Laws of a REIT.
8)

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Exchange- means any entity registered with the Commission as a stock exchange pursuant to
the Securities Regulation Code.
9) Material Contract- refers to an agreement or arrangement
where the amount involved is at least five percent (5%) of the Deposited Property of the REIT
or which is not entered into in the ordinary course of business of the REIT
10) Synthetic
Investment Products- are derivatives and other securities created exclusively out of one or
more financial instruments to simulate the returns of the underlying assets or indices of asset
values, including, but not limited to warrants, options, interest rate derivatives, currency
derivatives, equity derivatives and credit derivatives such as credit-linked notes,
collateralized debt obligations, total return swaps, credit spread options and credit default
options.

405 words

2.

List two alarming signs of negative offsets that you think needs for government
intervention. Explain why and suggest best intervention to address such shortcomings.
(30pts.)

TYPE: ESSAY

Score: 30pts.

Your Answer: check

These are some of the alarming signs of negative offsets that need government
interventions:
>>Closure of small and medium enterprises and cooperatives during the
pandemic.- It is evident that many business owners cry for help in the past years, especially
in the SMEs and cooperatives which increases starting the pandemic. Some of them had
already decided on a business closure which affects both the individuals who seek
employment and the government who aims to pay off the national debt by increasing the
collection effort in taxes and other transactions of accumulating wealth to cover
expenditures. With this, I think the following may address such shortcomings:
*Provide
credit to the owners. For example, the Land Bank of the Philippines opens more
opportunities to SMEs and cooperatives by extending credit lines at an acceptable rate
which helps boost their business.
*Extending training and seminars to the employees and
owners on how to manage finances and operations, especially in this time of crisis. For
example, DTI engages in nationwide free training and seminars for SMEs and cooperatives
*Reduce renewal permit fees and taxes, if not possible, may add installment basis on

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 payments
>>The decreasing number of business expansions or openings due to excessive or
too many requirements yet expansion costs were already incurred. - It is always the goal of
the government to have a sustainable economy yet some of the regulatory requirements in
opening or expanding a business are so strict with regards to the requirements and some of
them are excessive in nature. Though the government already executed the "Ease of Doing
Business" under RA 11032, it is still impractical to have excessive documents which may
drag the time of accomplishing those. Also, there are times when different offices under the
same agencies have different interpretations of the law, IRR, and policies and procedures.
As a consequence, some business owners are now reluctant to expand or open a business
considering the time (which may contribute to the payback period) and cost incurred during
the process. Moreover, here are my suggestions for addressing the shortcomings:
*Standardization of and simplifying the requirements
*Availability of complete and detailed
requirements through online
*Online portal for transactions that is practical and allowed to
be in an online set-up
*Regular free training and seminars regarding the process flow in the
online and physical set-up
*Uniform interpretation of laws, IRR, and policies, and
procedures

387 words

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