Wow. What an awesome day it was! Thank you so much to everyone who asked questions and made our first ‘Ask An Attorney Day’ on Facebook such a success. (If you missed it, why not head on over to our page and take a look? https://web.facebook.com/MFLBR2009/) I think everyone agreed that our attorneys did an incredible job, dealing with so many varied inquiries in such a short space of time!
We hope we achieved our aim of giving something back to the community in which we live and work, and that we can do it again someday soon. We certainly seem to have made a lot of new friends!
Needless to say, The Law Firm of Mallari Fiel Brillante Ronquillo is open every work day for those who wish to consult us further. Our contact details are at the top of this page. And rest assured, whatever your concern: ‘we find solutions.’The Attorneys & Staff of MFBR
The Law Firm of Mallari Fiel Brillante Ronquillo
The Bangko Sentral ng Pilipinas (BSP) and Securities and Exchange Commission (SEC) are the main regulators of virtual currency in the Philippines.
The virtual currency policies and regulations in the Philippines are discussed below.
Bangko Sentral ng Pilipinas
Section 3 of the New Central Bank Act provides that the BSP shall provide policy directions in the areas of money, banking, and credit. It shall have supervision over the operations of banks and exercise such regulatory powers as provided in this Act and other pertinent laws over the operations of finance companies and non-bank financial institutions performing quasi-banking functions, hereafter referred to as quasi-banks, and institutions performing similar functions.
At the onset, the BSP issued the Warning Advisory on Virtual Currencies dated 06 March 2014, wherein it defined a virtual currency as “a form of unregulated digital money, which is not issued or guaranteed by a central bank.”
Several years later, the BSP issued Circular No. 944, Series of 2017, dated 06 February 2017. This time, the BSP recognized that virtual currency (VC) systems have the potential to revolutionize delivery of financial services, particularly for payments and remittances, in view of their ability to provide faster and more economical transfer of funds, both domestically and internationally, and may further support financial inclusion.
With this development, the BSP issued guidelines for virtual currency exchanges.
In December 2017, the BSP issued the Advisory on the Use of Virtual Currencies (29 December 2017) encouraging existing and prospective virtual currency users to deal only with BSP-registered VC exchanges.
On 10 and 16 April 2018, the BSP issued advisories defining virtual currency as a type of digital currency created by a community of online users, stored in electronic wallets, and generally transacted online. The BSP reiterated its earlier stance that a virtual currency is not issued or guaranteed by central banks or government authorities. The advisories summarized the differences between a fiat, e-Money, and virtual currency.
Securities and Exchange Commission
Section 5 of the Securities and Regulation Commission provides:
“The XXX Commission shall have, among others, the following powers and functions:
(a) Have jurisdiction and supervision over all corporations, partnerships or associations who are the grantees of primary franchises and/or a license or a permit issued by the Government;
(b) Formulate policies and recommendations on issues concerning the securities market, advise Congress and other government agencies on all aspect of the securities market and propose legislation and amendments thereto; XXX”
In December 2017, the SEC issued the draft rules and regulations on crowdfunding. While said rules are not yet operative (as of this posting), the draft includes regulations on raising funds through Internet platforms (programs or applications accessible via the Internet or other similar electronic communication media through which a registered broker or a registered funding portal acts as an intermediary in a transaction involving the offer or sale of securities).
On 08 January 2018, the SEC issued the Advisory on Initial Coin Offerings. Virtual currency was defined as a digital representation of value issued and controlled by its developers and used and accepted among the members of a specific community or users. The SEC stated that some of the new virtual currencies follow the nature of a security, which is under the jurisdiction of the SEC and has to be registered and necessary disclosures have to be made for the protection of the investing public. This advisory, in turn, reinforces the possible applicability of the draft rules on crowdfunding to virtual currencies.
Further, under Section 3.1 of the Securities Regulation Code (SRC), “securities” are defined as shares, participation or interests in a corporation or in a commercial enterprise or profit-making venture and evidenced by a certificate, contract, instruments, whether written or electronic in character. Under Section 3.1(b) in relation to Section 26.3.5(d) of the 2015 IRR of the SRC, a security includes an “investment contract”, which is defined as a contract, transaction or scheme (collectively “contract”) whereby a person invests his money in a common enterprise and is led to expect profits primarily from the efforts of others. An investment contract is presumed to exist whenever a person seeks to use the money or property of others on the promise of profits.
Thus, where the virtual currency offered is in the nature of a security, it should be registered pursuant to Section 8 and 12 of the SRC. Failure to comply with the registration and disclosure requirements may lead to criminal prosecution.
In April 2018, the SEC issued an advisory warning the public against investing their money in investment products offered by unregistered online investment entities. The SEC enumerated the schemes employed by the unregistered entities, which includes the claim that investors may invest their funds in Bitcoin and other cryptocurrencies to justify their earning capacity. The SEC advisory also warned the public of the rampant internet-based Bitcoin and cryptocurrency Ponzi schemes.
With the rising popularity of virtual currencies in the Philippines and globally, it is of utmost importance for persons dealing with virtual currencies to remain vigilant as to the regulations imposed by the government. It is always better to arm yourself with knowledge!
Atty. Stephanie Tible.
July 19 2018. StatWeather Institute in Asia, Leadership Meeting at the MFBR offices. Saving Lives Through Climate Solutions.
Pictured left to right:
- Robert Mallari (Legal Counsel, Treasurer)
- Stephanie Tible (Director)
- Liza Makinano (Vice President, Partnerships)
- Ria Persad (Founder & President)
- Eileen Cabiling (Film Producer/Documentarian)
- Peter Learmouth (Public Relations, Writer)
- Glenn Banaguas (Vice President, Special Projects)
27 June 2018: MFBR Joins Forces WithStatWeather Institute Inc.MFBR Managing Partner, Atty. Rob Mallari, and colleague Atty. Stephanie Tible, meeting with StatWeather founder/CEO Ms. Ria Persad recently in Manila. In furtherance of its environmental CSR, the Law Firm of Mallari Fiel Brillante Ronquillo proudly announces its partnership with StatWeather Institute Inc., counterpart of US-based StatWeather, a social enterprise founded in 2009 by its CEO Ria Persad. StatWeather was the 2013 Newcomer of the Year Award and ranked as a top global provider in the Weather Data Management category of Energy Risk Software Rankings. MFBR and StatWeather look forward to contributing new research and development on climate and disaster risk management in the Philippines. For more information on StatWeather, please visit their website: http://www.statweather.com.
The Law Firm of Mallari Fiel Brillante Ronquillo
The Law Firm of Mallari Fiel Brillante Ronquillo
For most of us the word ‘negotiation’ conjures up images of politicians or union leaders, sitting round a table hammering out a deal. Nothing to do with us, right? Well, wrong, actually. Because when you think about it, life is full of negotiations. What about that discussion with your partner about whether to watch a re-run of Sex and the City on HBO or that Golden State Warriors finals game on the NBA channel? Or that debate with your bestie about keeping your group selfie on your Facebook page despite a mad emoji delivered to your messenger? Or that chat with your boss about a raise? The fact is, we negotiate all the time, we just call it something else. So maybe it wouldn’t hurt to be a little better at it?
Having recently completed a course in Negotiation at Harvard University, I thought I might share with you some of the knowledge I gained in Cambridge by publishing some articles on the subject which I hope you will find interesting and relevant, even though you aren’t Angela Merkel. (Or perhaps you are? Hello ma’am!)
Let’s start with some tips on how to prepare to negotiate.
- Have a problem-solving mindset.
As a lawyer I must admit that some of our clients expect us to win all the time (at any cost, I might add!) even in those situations which do not involve a judge to decide who’s right or wrong. I can’t blame them; people often approach negotiation with the narrow view that winning is everything. Experts at the Program on Negotiation at Harvard Law School, however, encouraged us to look at our negotiations as ‘a shared problem to be solved jointly.’
The term they use is collaborative enterprise. The idea is to bridge the gap between two opposing claims by creating value out of the parties’ differences. As a negotiator for yourself or others, try to play the role of a problem-solver where the parties sit down and brainstorm on ways to make everybody happy at the end of the process. You might think that’s impossible, but think again. The trick is to be willing to trade on your preferences across different issues, sort of trying to make all parties win some.
- Preparation is the key.
This is where self-awareness comes in handy. Preparation, in the context of negotiation, includes being conscious of your own talents and resources and figuring out how to use them in getting the best out of a negotiation. Sometimes you might even have to take a step back after realizing that you are not the best person to negotiate a particular transaction.
I cannot stress enough that lack of preparation can lead to either insecurities or overconfidence. In both cases, it is due to the negotiator’s failure to appreciate the facts as they really are. How a negotiator will approach a situation is greatly influenced by the extent and accuracy of his or her knowledge of the parties’ claims, priorities and room for concessions.
So, do not just rely on your seat of the pants wisdom. Do your homework. Start by making an inventory of your own skills and experience. Get to know the parties to the negotiation, and you can ask your colleagues to help you assess your and the other party’s set of options.
- Create your Allies.
The classic example used in our negotiation course was when the US rallied support for the Gulf War following Saddam Hussein’s military invasion of Kuwait. George H. W. Bush’s government convinced the U.N. Security Council that Saddam Hussein was bad for Kuwait, so when the US took the chair of the council it was able to achieve a resolution to use force against Hussein. James Baker, George H. W. Bush’s Secretary of State, summed it up best when he said: “get your allies on board first.”
To apply this wisdom to our negotiations, we simply have to remember that we can use a bit of help from our networks of friends, acquaintances and people of good repute who can influence the way those at the negotiating table perceive our goals. The aim is not to create a hostile environment; it’s about encouraging people to pay attention to what we have to say. And hopefully, having done our homework, we will actually have something useful to say.
- Identify and Assess your BATNA.
One cannot begin and end a negotiation course at Harvard without learning what BATNA means. Technically, it means your Best Alternative To a Negotiated Agreement. It’s what we might otherwise call our fall-back option or back-up plan or our plan b. We cannot enter a negotiation without an alternative solution to our present dilemma independent of the will of the party at the other end of the table. To do so might potentially lead to dismal concessions, which could be even worse than having no agreement at all.
Since I cannot improve on Professor Lawrence Susskind, allow me to quote him verbatim: “[w]hen managing the tension between creating and claiming value, you must determine the point at which you would walk away from the current negotiation and accept your best alternative to a negotiated agreement, or BATNA. Because it allows you to reject a mediocre agreement, a strong BATNA is typically your best source of power in a negotiation.”
- Decide on your reservation values and goals.
The two important values we need to identify are: (a) the reservation value, or the bottom line, and (b) the aspiration level, or the goal.
The reservation value is the resistance point, meaning the least you will accept in the current negotiation. If the other party cannot meet this value, e.g. the price of whatever commodity you’re bargaining for, then you must be willing to walk away and be content with your BATNA.
The aspiration level, is the potential value you can create out of the current negotiation which far exceeds your BATNA. You may or may not achieve it; but the hope is that the outcome of your negotiation will closely resemble the rosiest scenario you pictured in your head when you first began analyzing the parties’ options.
- Aim for a Win-Win Scenario.
This was probably my favorite part of the lecture on value-creation, because it was where we were asked to exercise empathy and just for once to stop being so selfish. The lesson here is to see the bigger picture and widen one’s horizons beyond what can be gained from a single transaction.
As negotiators, we can develop an eye not only for the tangible interests but also the intangible ones, such as building a long-term relationship or saving face in the aftermath of an error. It is an invitation for people in the negotiation to talk and keep an open mind about what each party to the transaction may claim as value, even if at the beginning it seemed as though their interests were inherently incompatible.
Parties in a brainstorming session can start this process by identifying the shared interests and differing interests, in the hope that somewhere down this road they can identify the values (or rewards) they’re willing to accept and those that they are inclined to give away.
In my experience as a lawyer in the Philippines attending mediation conferences in court-annexed alternative dispute resolution proceedings, mediators will always begin their facilitation by saying that their mandate is to reach a win-win solution. In a way, that’s the lesson this tip is hoping to impart: there’s no need for someone to be leaving the room with a sad face.
(Reference: This article is a rewrite of the article entitled “Negotiation Basics, Master Class – New Report” published on 2017 by Professor Lawrence Susskind and the Master Class Teaching Team at Harvard University, Cambridge, Massachusetts, U.S.A. and the author makes no claims of unrestricted right to ownership over the copyrighted materials belonging to aforesaid source.)