Why can a prospectus only be viewed in the Philippines?

Thanks to Jack Plumber for this great question. Anyone who has tried to download a prospectus for an IPO, FOO, SRO, or bond offering has likely encountered the scary-looking “THIS INFORMATION IS TO BE VIEWED EXCLUSIVELY WITHIN THE PHILIPPINES” notice at some point, and perhaps has even had to download the PDF using a VPN at some point. Why is it like this? The answer is to limit legal liability. A prospectus is a legal document that is meant to bring the issuing company into regulatory compliance with the SEC’s and PSE’s legal requirements for listing in terms of the information that must be disclosed to the potential buyer. However, the SEC’s laws are applicable only to the Philippine context. Does the prospectus also comply with the securities laws of the US, Germany, Singapore, and Japan? There’s no good way for the issuing company to be aware of all the restrictions for all the jurisdictions in the world, let alone draft a document that would somehow be suitable for all (or individual documents for each). The simplest thing to do is to throw up one of those scare barriers and force the downloader to make the declaration that they’re inside the Philippines. The company doesn’t have to aggressively police the outcome (they’re not going to require a PH-based SIM to confirm a download), but they have to make some effort to prevent dissemination of the prospectus to potential buyers from other jurisdictions.

MB bottom-line: Some scare barriers are better than others. I can remember a few over the years that I was able to overcome just by checking a box asserting that I was within the Philippines (even while on a VPN routed through Japan), while there have been others (the recent CREC offering being the most memorable) that outright denied my Japan-routed VPN and then wouldn’t even accept it once I was back on my PLDT-based broadband connection. At the end of the day, the scare barriers are just there to protect the issuing company from legal liability that may attach to it for its failure to conform the offering to the laws of foreign jurisdictions. It doesn’t stop me from feeling like a badass spy, viewing my precious prospectus PDFs in international waters!

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