Policies, Sanction & Appeals Process

 

1) Policy 🏛

The success of the our platform rests heavily on the health of the community and ecosystem supporting it. Proper conduct, trust and transparency are necessary to develop a strong culture of entrepreneurship and investing. Every user is responsible for working together with us and their community to foster this positive environment. 

The success of the our platform rests heavily on the health of the community and ecosystem supporting it. Proper conduct, trust and transparency are necessary to develop a strong culture of entrepreneurship and investing. Every user is responsible for working together with us and their community to foster this positive environment. 

All content on the platform is aimed to create an environment conducive to investing and due diligence, content unrelated to these main goals are tolerated insofar as they remain within standards of this community, common decency, morality, is neither spam, harassing in nature nor excessive in its posting.

Information and data presented on the platform related to any investment decision must be of the highest quality and veracity. The Intermediary considers conduct that negatively impacts the integrity of such data as the utmost grave and egregious of all violations enumerated in this document.

This document has been prepared as a manual in compliance with SEC MC no. 14, s. 2019, SEC Form CF-I - Exhibit B, the Intermediary’s proposed rules and operational framework addressing: Discipline of Participants & Users (Including Sanctions & Appeals)

• [I.] Defining Misconduct
• [II.] Disciplinary Actions & Sanctions
• [III.] Appeals Process

 

2) Purpose 🎯

By setting standards of violative behavior and corresponding sanctions, the Round One seeks to create an orderly and professional investment network where all users are free to safely express their opinions and viewpoints. The platform encourages lively debate and differences of opinion but will not tolerate attacks, slander, bullying and other forms of inappropriate speech and behavior.

As a community, we consider all members as part of the same network of support and encouragement. We are committed to improving our nation’s status as an attractive investment destination and the upliftment of our countrymen in the pursuit of wealth and happiness. Above all, this community and its users are ruled by the 👑 Golden Rule 👑- requiring us to act in accordance with our own expectations of how we wish to be treated.

 

3) Definitions 📕

SRC - Securities Regulation Code, RA.8799 omnibus legislation for the regulation of Securities

AMLA - Anti Money Laundering Act, RA.9160 legislation covering the investigation and mitigation of money laundering and related financial crimes

 

4) Misconduct 🚫

Regulatory Violations 

• (i) Any violation of the rules governing crowdfunding activity shall fall under Sec. 10 of the CF IRR, immediate notifications to the Commission.
  • Solicitation without registration (CF-O)**
• (ii) Including an attempt to solicit investments through communication channels without first registering securities with the platform
• (iii) Violation of provisions of the SRC and its rules related to Crowdfunding activities**
• (iv) Fraud, Misrepresentation, Manipulation & Deceptive Practices**
• (v) Violation of the Anti Money Laundering Act**
• (vi) Failure to provide any disclosure requirements (Section 45)*
  • Withhold approval of account registration, restricted access to platform services
• (vii) Issuer Disqualification***
• (viii) Unwilling/recalcitrant compliance to due diligence procedures*
  • Denial of account registration, restricted access to platform services 
• (ix) Failure to identify promotional activity*
• (x) Failure to provide compensation disclosures*
• (xi) Failure to provide Issuer Information (Section 18)*
• (xii) Failure to provide Investor Qualification Requirements (Section 19)*
  • Denial of account registration, restricted access to platform services
• (xiii) Violations of the Data Privacy Act of 2012**
• (xiv) Failure to provide timely and accurate records*
• (xv) Failure to submit annual report of issuers*
• (xvi) Failure to submit progress updates*

_____________

* Minor Violations

** Major Violations

*** Grave Violations

Violations of Community Guidelines, Communication Channel Misconduct

 

Spam, Deceptive and Manipulative Practices 🚯

• (i) Fake accounts utilized to spread false or negative information, hype an issuer or issuer’s campaign** 
• (ii) Impersonation of any kind such as impersonating an investor group, representative of an issuer or another user**
• (iii) Scam content and content related to illegal activity**
• (iv) Bot behavior or other automated means of posting content detrimental to the platform and its community**
• (v) Malicious activity, misuse-activity detrimental to the functioning of the site and the platform**
• (vii) Frequent funding commitment and cancellation meant to crowd-out legitimate funding*
• (viii) Spam that  is excessively posted, untargeted and repetitive comments, content or advertisements*

Prohibited Content 📵

• (i) Excessive posting of content unrelated to platform activity, issuers, issuer campaigns and entrepreneurship or fundraising*
• (ii) False or misleading content and information regarding platform activity*
• (iii) Scam content and content related to illegal activity**
• (iv) Nudity, violence, child exploitation, drug abuse or any illicit activity***
• (v) Copyrighted content or any regulated activity*

Prohibited Speech 🔞

• (i) False or misleading statements and information regarding platform content*
• (ii) Hate speech, inflammatory, inciting, discriminatory or sexist language*
• (iii) Terrorism, speech or language espousing or inciting violence***
• (iv) Harassment, bullying, offensive, uncivil language*
• (v) Inappropriate, lewd, obscene, sexual language*

_____________

* Minor Violations

** Major Violations

*** Grave Violations

It is at the sole discretion of the Intermediary to elevate any initial assessment of ‘minor misconduct’ to the level of ‘major’ or ‘grave misconduct’ depending on impact and context. 

Example: In cases where false statements were later found to be made with the intent to mislead or, in cases where user accounts are compromised and used for malicious purposes.

In assessing disciplinary action, the Intermediary also takes into consideration any community response or customer complaints whereby the platform’s reputation may be severely impacted. Any activity that is illicit, criminal in nature or prohibited by law will be promptly turned over to the proper authorities.

 

Termination and Suspension 🛑

• (i) User has breached the terms in the Platform Agreement or terms of service in this Platform in a serious or persistent way and the user has not rectified the matter within a reasonable time of Round One requesting the user to do so;
• (ii) Users have broken or attempted to break the law, or put Round One in a position where we might break the law;
• (iii) Users are using the Platform in a way that is harmful to Round One, such as causing harm to our Platform or our reputation;
• (iv) User has provided false information;
• (v) User has been abusive to anyone at Round One or another Round One member; or
• (vi) If the Intermediary is  required do so under any law, regulation, or by a governmental or regulatory authority.
• (v) User actions that causes, or is likely to cause, the Website or access to it to be interrupted or damaged in any way, 
• (vii) For fraudulent purposes, or in connection with a criminal offense, 
• (viii) To send, use or reuse any material that is illegal, offensive, abusive, indecent, defamatory, obscene or menacing, is otherwise injurious to third parties or which consists of or contains software viruses, political campaigning, commercial solicitation, chain letters, mass mailings or any spam or (4) to cause annoyance, inconvenience or needless anxiety; which gives rise or may give rise to criminal or other liability on our part. 

After a notice has been served, access to the platform shall be subject to immediate suspension or termination. 

Upon termination of access to the platform, membership to the platform and the agreements Round One and the user entered shall likewise be terminated if information about membership states or leads the Intermediary to believe that the user is no longer eligible to be a Round One member. 

The Intermediary may suspend Round One membership until it determines that the user is again eligible to be a Round One member.

 

5) Disciplinary Action 👮‍♀️

Round One may, on its own discretion or upon the complaint or report of another Platform user, impose disciplinary actions on any platform user who violated this document. 

For every complaint or reported violation, Round One shall strictly observe due process. Round One will send a Notice of Violation/s and Notice of Suspension or Termination, if it is indeed the user violated some terms of this document.

Disciplinary Action: Issuers & Investors 

• (i) Any issuer and issuer representative found to fall under disqualification provisions outlined by the Commission prior to account opening shall not be allowed to register to the platform.
• (ii) Major and grave violations outlined in Section 2(a) of this document shall result in the immediate suspension and subsequent termination (subject to further investigation) of any issuer accounts and ongoing campaigns after a due notice is served. 
• (iii) Activity outlined in Section 2(a) related to noncompliance with account registration requirements prevents an issuer from initiating a campaign. The Intermediary’s platform administrator controls are sufficient to prevent users from accessing various platform functions should they be unable to fulfill all account registration requirements.
• (iv) Aside from very few possible exceptions, issuers who engage in prohibited community conduct outlined in Section 2(b) shall have accounts irrevocably suspended from campaign activity. If misconduct is isolated to an issuer representative who has since been relieved of their ability to participate on the platform, an issuer may engage the disciplinary policies’ appeals process to restore their access to the platform’s services.
• (v) Investors who are subject to sanction for violation of speech or content rules by the Intermediary shall not be allowed to participate in communication channels for a period of at least 180 days. 
• (vi) Investors subject to sanctions for grave or major misconduct will:
  • (a) no longer be able to participate in communication channels,
  • (b) have all funds committed to campaigns be revoked and refunded
  • (c) forbidden from investing in issuer campaigns and
  • (d) have their cash account immediately terminated and refunded
  • (e) have their account details along with an official report of the incident submitted to the Commission for review.

Due Process: Major or Grave Misconduct 🔧

• (i) Initial Notice of Failure to Comply (Major, Grave)
• (ii) Suspension of all user privileges up to and including ongoing campaign activity or campaign initiation 
• (iii) Notice of Suspension transmitted to issuers detailing:
  • Description & nature of violative conduct, citation of rules breached
  • Reminder of ongoing disclosure obligations 
  • Demand for cooperation with investigation into violative conduct
• (iv) Notice to Explain to be provided by issuer to the Intermediary
• (v) Notice of Final Assessment of Misconduct
• (vi) Fine of P25,000 to P50,000
• (vii) Termination of any ongoing campaign activity 
  • Refund of investment funding commitments back to respective investors. 
• (viii) Notice to investors of Final Assessment
• (ix) Restrict access to issuer’s profile and information to current crowdfunding equity investors
• (x) Report incident to the Commission and other regulatory authorities for documentation and review

Due Process: Minor Misconduct 🔧

• (i) Initial Notice of Failure to Comply (Minor)
  • First Written Warning
  • A period of 5 business days with which to correct noncompliance
• (ii) Second Notice of Failure to Comply
  • Second Written Warning
  • Fine of P1,000 and a 25% surcharge for every month the fine is not paid
  • A period of 5 business days with which to correct noncompliance
• (iii) Third Notice of Failure to Comply
  • Third Written Warning
  • Fine of P2,000 and a 25% surcharge for every month the fine is not paid
  • A period of 5 business days with which to correct noncompliance
  • Notice to Explain
• (iv) Final Notice of Failure to Comply
  • Elevation of disciplinary action to Major or Grave Misconduct

 

6) Disciplinary & Sanction Appeals ⚖

Appeals Process 👩‍⚖️

The appeals process for Major or Grave violations are as follows:

• (i) Users shall settle any outstanding fines, fees or balances of their cash account
• (ii) Upon the initial notice of suspension of account or campaign activity, users shall be granted an opportunity to explain the reasons and extenuating circumstances for apparent misconduct and any corrective measures it shall undertake. 
• (iii) In circumstances that allow such, users may appeal in writing any Final Assessment issued by the Intermediary and any corrective measures it shall undertake
• (iv) User may be called to participate in an interview conducted by the Intermediary’s legal and compliance teams  in connection to any appeals process
• (v) Only in cases where misconduct is attributable to an account belonging to a representative of a user’s organization that is not a C-level officer, director, +10% shareholder or board member, may the user’s organization appeal a Final Assessment resulting in termination of campaign & account activity, provided that sanctioned users are no longer allowed to participate in the platform and a description of punitive sanctions imposed by the organization on the users is submitted to the Intermediary
• (vi) In instances where misconduct may have been the result of error, oversight or compromised accounts, apart from the foregoing process of appeal, it is the discretion of the Intermediary to issue continued written warnings in lieu of elevating misconduct to major or grave.
• (vii) The Intermediary will submit an opinion and course of action within 30 days of receipt of the appeal. 

 

Detailed Procedure for Imposition of Disciplinary Actions

Due Process 🔧

• (i) Notice of Violation
• (ii) With Notice of Investigation
• (iii) With Notice to Explain or to Answer
  • Must be filed/sent within two (2) days from the receipt of the Notice of Violation
  • Failure to file an answer shall be tantamount to a waiver of the right to answer.
• (iv) Notice of Suspension or Termination (If the explanation is not justifiable)
  • Depending on the gravity of the violation
  • Shall be sent within three (3) days from receipt of the answer or 
  • Within 24 hours after the lapse of the prescriptive period to answer
• (v) Appeal & Appeal Review (must be sent within 3 days from the Notice of Termination or suspension)
  • Failure to file an appeal within the prescriptive period shall be tantamount to a waiver of the right to answer.
• (vi) Only Minor and Major Offense are appealable
• (vii) Final Assessment/Answer to the appeal
  • Sent within five (5) days after the receipt of the appeal.

Summary of Penalties

Minor Offenses

• (i) First Offense: Warning
• (ii) Second Offense: Suspension for 10 Days
• (iii) Third Offense: Suspension for 15 Days
• (iv) Fourth Offense: Termination of Access or Banning.

Major Offenses

• (i) First Offense: Suspension for 30 days 
• (ii) Second Offense: Suspension for 45 days 
• (iii) Third Offense: Termination of Access or Banning

Platform users who have previously been reported for violating a Major Offense or have previously suffered suspension for violation of a Minor Offense, shall suffer for an additional five (5) days suspension. Platform users who committed two or more simultaneous Minor Offenses, shall  be constituted in this document as having committed a Major Offense.

Grave Offense ⚰

• (i) Termination of Access or Banning

Platform users who committed two or more simultaneous Major Offenses shall  be constituted in this document as having committed a Grave Offense.