SEC Latest Issuances
SEC REQUIRES LISTED COMPANIES & OTHER PUBLIC INTEREST ENTITIES TO DISCLOSE FEES PAID TO EXTERNAL AUDITORS
DECEMBER 26, 2024
SEC Memorandum Circular (MC) No. 18, Series of 2024 circularizes the guidelines on the disclosure of fee-related information of external auditors for publicly listed companies and other corporations imbued with public interest to enhance transparency and accountability in the reporting of their financial and operational results. The mandate is also aligned with the requirements under the Code of Ethics for Professional Accountants.
SEC GRANTS INCENTIVES FOR CORPORATIONS TO COMPLY WITH REPORTORIAL REQUIREMENTS
AUGUST 30, 2024
SEC Memorandum Circular (MC) No. 13, Series of 2024 adopts an Enhanced Compliance Incentive Plan (ECIP) which rolls out an incentive program that allows corporations, which have failed to submit their annual reports on time, to restore their good standing.
Highlights include:
a. Non-compliant corporations, including those placed under “delinquent” status, may settle their unassessed or unpaid fines and penalties for Php 20,000 only.
b. Suspended and revoked corporations, including those with pending Petitions for the Lifting of the Suspension or Revocation Order issued against them, may settle only 50% of their assessed fines and pay the petition fee of Php 3,060.
c. Covered violations include:
1. Non-filing of General Information Sheet (GIS) for the latest and prior years
2. Late filing of GIS for the latest and prior years
3. Non-filing of Financial Statements (AFS), whether audited or certified, including fines for the non-filing of the attachments required for certain corporations, for the latest and prior years
4. Late filing of AFS, including fines for the late filing of the attachments required for certain corporations, for the latest and prior years
5. Violations under SEC Memorandum Circular No. 28, Series of 2020, which requires all entities registered with the Commission to designate and submit their official and alternative email addresses and mobile phone numbers.
d. Applications of non-compliant, suspended and revoked corporations for ECIP may be submitted starting September 2, 2024, and until November 30, 2024.
e. Eligible and disqualified corporations
f. Application process
SEC UPDATES FINES & PENALTIES ON THE LATE & NON-SUBMISSION OF AFS, GIS & OTHER REPORTORIAL REQUIREMENTS
MARCH 27, 2024
SEC Memorandum Circular (MC) No. 6, Series of 2024 circularizes the updated fines and penalties on the late and non-submission of Audited Financial Statements (AFS), General Information Sheet (GIS), and non-compliance with SEC MC 28, which requires corporations, partnerships, associations, and individuals to create an email address and designate a mobile phone number for transactions with the SEC.
SEC LAUNCHES PORTAL FOR AMENDMENT OF INCORPORATION PAPERS
FEBRUARY 19, 2024
SEC Memorandum Circular (MC) No. 3, Series of 2024, posted on February 19, 2024, sets the guidelines on the use of the Electronic Application for Modification of Entity Data (eAMEND) Portal.
Starting February 23, 2024, applications for amendments to a corporation’s Articles of Incorporation and/or By-Laws shall be made through the eAMEND Portal, in line with the Commission’s shift to electronic filing, mandated under Republic Act No. 11232, or the Revised Corporation Code of the Philippines.
Highlights include the kinds of application that will be issued with digital certificate and those to be given original certification along with the supporting documentations and process involved.
SEC INTEGRATES COMPLIANCE OF NEWLY REGISTERED CORPORATIONS WITH THE eSPARC REGULAR & OneSEC PORTALS & THE AUTOMATIC ENROLMENT TO THE eFast PORTAL
DECEMBER 18, 2023
SEC Memorandum Circular (MC) No. 23, Series of 2023 integrates certain reportorial requirements with the registration process and provides for the automatic enrollment of newly registered corporations in the SEC online submission portal. Specifically, new corporations will no longer have to submit separate reports for their official and alternate email addresses and mobile phone numbers required under MC 28, as well as information on their beneficial owners pursuant to MC 1 starting December 18. They shall be required to provide such information during the registration process either through eSPARC or through its subsystem, One-Day Submission and E-registration of Companies (OneSEC).
SEC AMENDS THE GUIDELINES ON ASSET VALUATIONS FOR SEC-ACCREDITED APPRAISAL COMPANIES OR PROFESSIONAL SERVICES ORGANIZATIONS
NOVEMBER 14, 2023
SEC Memorandum Circular No. 21, Series of 2023 amends SEC Memorandum Circular No. 2, Series of 2014, concerning guidelines on asset valuations. The revision of the guidelines on asset valuation focuses on the accreditation, operational requirements, and reporting requirements for appraisal companies and valuation specialists.
Highlights include the adjustment of the ownership requirements to 100% Filipino-owned under the 12th Foreign Investment Negative List (FINL) (issued on June 27, 2022) to comply with the requirements that no foreigners are allowed to practice a profession in the Philippines, which include among others, Real Estate Services unless their home country allows Filipinos to be admitted to the practice of the said profession.
SEC FURTHER EXTENDS AMNESTY APPLICATIONS UNTIL DECEMBER 31, 2023
NOVEMBER 6, 2023
SEC Memorandum Circular No. 20, Series of 2023 further extends the amnesty applications until December 31, 2023. The final extension is granted in consideration of requests from the public as well as numerous applications with incomplete submission of amnesty requirements, such as the Petition to Lift Order of Suspension or Revocation for corporations with suspended or revoked Certificates of Incorporation (COI), and the Audited Financial Statements (AFS) through the SEC Electronic Filing and Submission Tool (eFAST).
Corporations only have until December 31, 2023, to signify their intent to apply for amnesty and settle corresponding amnesty fees. The subsequent period starting from January 1 to January 31, 2024, shall only be dedicated to the submission of amnesty requirements and supporting documents. Failure to comply within the submission period shall warrant the forfeiture of the paid amnesty or filing fees in favor of the Commission. Thereafter, an updated scale of fines and penalties for the covered reportorial requirements shall be effective on January 1, 2024.
SEC ISSUES GUIDELINES ON CORPORATE DECLARATION OF DELINQUENT STATUS & REVOCATION OF CERTIFICATE OF REGISTRATION UNDER THE REVISED CORPORATION CODE
OCTOBER 26, 2023
SEC Memorandum Circular No. 19, Series of 2023 provides guidelines on the declaration of delinquent status and revocation of certificate of registration of corporations under Sections 21 and 177 of the Revised Corporation Code.
Highlights include:
a. Revocation of the Certificate of Incorporation upon failure of the corporation to organize and commence its business within five (5) years from its incorporation.
b. The mandate of sending a show cause order to the officers directing them to appear before the Commission and show cause why its status should not be delinquent.
c. Effects of delinquent status.
d. Resumption of operations within two (2) years from receipt of Order of Delinquency and submission of required documents as proof of operations.
e. Revocation of the Certificate of Incorporation upon failure of the corporation to provide requirements specified in Sections 6 and 9.
f. Declaration of Delinquent Status upon failure of the corporation to file its Financial Statements (FS) and/or General Information Sheet (GIS) for three (3) consecutive or intermittent times.
g. Submission of audited FS, GIS, director or trustee compensation report, and director or trustee appraisal or performance report, as applicable, within six (6) months from the receipt of Order of Delinquency.
h. Filing of Petition to Lift the Order of Delinquency within two (2) years from the receipt of Order of Delinquency.
i. Filing of Petition to Lift the Order of Revocation anytime.
j. Submission of documentary requirements for Petition to Lift the Order of Delinquency or Revocation.
k. Issuance by the Commission of reasonable notice and coordination with the appropriate regulatory agency prior to the declaration of delinquent status or revocation of companies.
l. Application of the 2016 Rules of Procedure of the SEC.
SEC PROVIDES GUIDELINES ON THE SUBMISSION OF DIGITAL COPIES OF APPLICATIONS, COMPLIANCE DOCUMENTS & OTHER REQUESTS & FURTHER REDUCES THE NUMBER OF HARD COPIES TO BE FILED
OCTOBER 9, 2023
SEC Memorandum Circular No. 18 Series of 2023 introduces guidelines for the submission of digital copies of applications, compliance documents, and other requests, and to further reduce the number of hard copies and promote sustainability. Highlights include the documents to be submitted online and in a reduced number of hard copies, the retention period of the hard copies of the documents, and the changes of address where the reports shall be submitted.
SEC EXTENDS THE AMNESTY APPLICATION PERIOD UNTIL NOVEMBER 6, 2023
SEPTEMBER 28, 2023
SEC Memorandum Circular No. 17, Series of 2023 extends the amnesty application period and payment of amnesty fees for eligible corporations until November 6, 2023. Supporting reportorial documents for all applications must be submitted between November 7, 2023, and December 4, 2023, and failure to comply with this requirement will result in the forfeiture of paid amnesty or filing fees. The revised fines and penalties prescribed in the Circular will be enforced starting November 7, 2023.
SEC REVISES THE GUIDELINES ON THE DETERMINATION OF RETAINED EARNINGS FOR DIVIDEND DECLARATION
SEPTEMBER 19, 2023
SEC Memorandum Circular No. 16, Series of 2023 revises the guidelines on the determination of Retained Earnings Available for Dividend Declaration, superseding previous directives under SEC MC No. 11-2008. Highlights include the scope and applicability of the determination of availability of retained earnings, amendments and format on the reconciliation of retained earnings available for dividends, and exceptions to the prohibition on retention of surplus profits in excess of paid-in capital.
SEC NOW INCLUDES CROWDFUNDING PORTALS AS AUTHORIZED REGISTRARS
SEPTEMBER 6, 2023
SEC Memorandum Circular No. 12, Series of 2023 amends Section 39.1.4.1 of the Implementing Rules and Regulation (IRR) of the Securities Regulation Code adding Section 29.1.4.1.7. Specifically, funding portals registered under the SEC Crowdfunding Rules and granted with secondary licenses are now considered authorized registrars of qualified institutional and individual buyers.
SEC ALLOWS THE OPTIONAL USE OF UNAUDITED FS TEMPLATES FOR NON-STOCK CORPORATIONS WITH TOTAL ASSETS OR TOTAL LIABILITIES OF LESS THAN PHP 600,000
AUGUST 30, 2023
In a Notice, the Securities and Exchange Commission (SEC) has advised all non-stock corporations with total assets or total liabilities of less than Php 600,000.00 on the use of Unaudited Financial Statements (FS) templates as optional, effective for the annual FS covering periods ending 31 December 2023 and onwards. All non-stock corporations with the aforesaid threshold for FS may utilize the templates of “Statement of Financial Position” and “Statement of Income and Expenses” in their submission of the annual reportorial requirement. The accomplished templates including the applicable explanatory notes to the FS shall be printed and certified under oath by the non-stock corporation’s Chief Finance Officer (CFO) or Treasurer. Further, a notarized FS is required to be uploaded via the online portal.
SEC FURTHER EXTENDS THE DEADLINE TO AVAIL OF AMNESTY
JUNE 27, 2023
SEC Memorandum Circular (MC) No. 9, Series of 2023 further extends the deadline for amnesty application under SEC MC Nos. 2 and 6, Series of 2023, until September 30, 2023, and streamlines the amnesty application process.
Highlights include the simplification of processes, such as the removal of undertaking to submit the latest due Audited Financial Statements (AFS) and shortened turnaround time for the release of Confirmation of Payment (COP).
It may be recalled that SEC MC No. 2, Series of 2023 grants amnesty for non-filing and late filing of the General Information Sheet (GIS) and Annual Financial Statements (AFS), and non-compliance with the creation and designation of official contact details pursuant to MC No. 28, Series of 2020. The extension was extended twice aligned with the aim of the Commission to encourage qualified corporations to avail.
SEC EXTENDS THE DEADLINE FOR THE AVAILMENT OF AMNESTY UNTIL JUNE 30, 2023
APRIL 28, 2023
SEC Memorandum Circular (MC) No. 6, Series of 2023 extends the deadline of all amnesty applications under the earlier MC No. 2, Series of 2023, until June 30, 2023.
It may be recalled that the original deadline was set until April 30, 2023. However, in consideration of the overlapping deadlines of reportorial requirements by the BIR and SEC, compliance with the Electronic Filing and Submission Tool (eFAST) enrollment, and the paramount objectives of the amnesty, that is to prudently identify active and inactive corporations to enhance better monitoring and enforcement, the SEC deems it necessary to extend the availment application.
Eligible corporations shall comply with the complete and correct set of requirements indicated in Section 3 of MC No. 2 within ninety (90) days from the date of payment. The extension shall automatically be applied without the need for a request from covered corporations. Non-compliance with the set of requirements shall be construed as a waiver to proceed with the amnesty process, and any payment made shall be forfeited in favor of the SEC.
SEC ISSUES RULES & REGULATIONS OF THE FINANCIAL PRODUCTS & SERVICES CONSUMER PROTECTION ACT OF 2022
APRIL 25, 2023
SEC Memorandum Circular No. 5, Series of 2023 provides the rules and regulations of the Republic Act (R.A.) No. 11765, otherwise known as "The Financial Products and Services Consumer Protection Act of 2022 (FPSCPA)."
It may be recalled that the law was passed in May 2022 with the objective of helping establish appropriate mechanisms to protect the interest of consumers of financial products and services under the conditions of transparency, fair and sound market conduct, and fair, reasonable, and effective handling of financial consumer disputes.
Highlights include the powers of the SEC to exercise authority over issuers of securities in all forms, as defined in the Securities Regulation Code, including issuing an order requiring accounting and disgorgement of profits obtained, or losses avoided for violating the law, regulating persons acting as or identifying themselves as financial or investment advisers in the country. Likewise, the IRR will now require such financial service providers to integrate a Consumer Protection Risk Management System (CPRMS) into its risk management processes and risk governance framework. Also, financial service providers will be required to have a cooling-off period of no less than three days for consumers to consider the costs and risks of availing themselves of their product or service.
SEC GRANTS AMNESTY FOR NON-FILING & LATE FILING OF THE GIS & AFS
MARCH 15, 2023
SEC Memorandum Circular No. 2, Series of 2023 grants amnesty for non-filing and late filing of the General Information Sheet (GIS) and Annual Financial Statements (AFS), and non-compliance with the creation and designation of official contact details pursuant to MC No. 28, Series of 2020.
Highlights include covered violations, amnesty rates, application processes and supporting documents, and exclusion from the coverage.
SEC EXTENDS THE DEADLINE FOR THE FILING OF THE 2023 AFS
MARCH 1, 2023
SEC Memorandum Circular (MC) No. 1, Series of 2023, dated March 1, 2023, extends the deadline for the filing of the 2023 Annual Financial Statements (AFS), thereby revising in part the earlier circular issued (i.e., MC No. 9, Series of 2022) to provide sufficient time for external auditors to complete their statutory audits.
SEC SETS THE DEADLINE FOR THE SUBMISSION OF 2022 AFS & GIS THROUGH eFAST
DECEMBER 6, 2022
SEC Memorandum Circular 9, Series of 2022, sets the deadlines for the filing and submission of the 2022 Audited Financial Statements (AFS) and General Information Sheet (GIS) of corporations through the Electronic Filing and Submission Tool (eFAST). All reports shall be submitted online through eFAST. Likewise, any problem encountered on the enrolment and submission as well as other reports that are not yet accepted through eFAST shall be submitted through ictdsubmission@sec.gov.ph and a dedicated e-mail address posted at https://www.sec.gov.ph/contact-us/, respectively. Further, no over the counter, mail, or courier under the SEC Express Nationwide Submission shall no longer be accepted.
SEC TRANSFERS HEADQUARTER’S ADDRESS TO MAKATI CITY & CEASES PASAY OPERATIONS
DECEMBER 1, 2022
In an Advisory, the Securities and Exchange Commission (SEC) has informed the public that it has moved and completed its transfer to its main office operations to The SEC Headquarters, 7907 Makati Avenue, Salcedo Village, Bel-Air, Makati City as of November 30, 2022. Likewise, the SEC has ceased operations at its former main office within the Philippine International Convention Center (PICC) Complex in Pasay City. The SEC will continue to observe a “zero face-to-face transaction” policy, in line with the zero-contact policy and automation of business-related transactions mandated by Republic Act No. 11032, or the Ease of Doing Business and Efficient Government Service Delivery Act of 2018.
SEC NOTICE ON PENALIZING MISLEADING, INACCURATE & INCOMPLETE INFORMATION IN THE COMPANY’S SUBMITTED REPORTS
OCTOBER 17, 2022
In an Advisory dated October 11, 2022, the Securities and Exchange Commission (SEC) has announced that effective November 2, 2022, reportorial requirements submitted by corporations using the Electronic Filing and Submission Tool (eFAST) shall be accepted and considered complete and accurate regardless of the forms and contents. Consequently, all inaccurate, incomplete, false, or misleading information on the submitted reports shall be penalized by the Compliance Monitoring Division (CMD) and/or other Operating Departments monitoring the reports in the amount of Php 20,000 to Php 200,000. If deemed to be “injurious or detrimental to the public,” the person or auditor may be punished with fines ranging from Php 40,000 to Php 400,000 pursuant to Section 162 of the Revised Corporation Code. Lastly, no report/s shall be returned to the filers for corrections, as amendments shall no longer be allowed unless directed by the Commission.
SEC ISSUES GUIDELINES FOR CORPORATE ARBITRATION OF INTRA-CORPORATE DISPUTES UNDER THE REVISED CORPORATION CODE
SEPTEMBER 19, 2022
SEC Memorandum Circular No. 8-2022 establishes guidelines for corporate arbitration of intra-corporate disputes in accordance with the SEC’s regulatory authority under Section 181 of Republic Act No. 11232, also known as the “Revised Corporation Code of the Philippines.”
Highlights include:
a. An intra-corporate dispute shall not be referred to arbitration when it involves criminal offenses and the interests of third parties.
b. An arbitration Agreement may be included in the articles of incorporation or by-laws of a domestic corporation.
c. When an Arbitration Agreement is in place, intra-corporate disputes shall be referred to the arbitration after compliance with any agreed pre-arbitration alternative forms of dispute resolution under the said agreement.
d. All Arbitration Agreements shall contain the number of arbitrators, the designated third party who shall appoint the arbitrator/s, the procedures for the appointment, and the period within which the arbitrator/s should be appointed.
e. The place of arbitration shall be presumed to be the Philippines unless otherwise stated.
f. The arbitral tribunal shall have the power to grant interim measures necessary to ensure enforcement of the award, prevent a miscarriage of justice, or otherwise protect the rights of the parties.
g. It also addresses the composition of the arbitral tribunal and appointment procedures as well as the disclosures by and challenge of arbitrators.
SEC EXTENDS THE DEADLINE FOR COMPLIANCE WITH THE TWO (2) PARTNER REQUIREMENT & TRANSITION FROM SOLE PROPRIETORSHIP TO PARTNERSHIP
JUNE 9, 2022
With the extension, the Office of the General Accountant will continue to accept applications for accreditation of sole practitioners and auditing firms with just one partner until March 31, 2026. This is to give way for the transition to comply with the requirements of the Revised SRC Rule 68 with the applicants' commitment to comply by June 30, 2026.
SEC ADVISORY ON SUBMISSION OF ANNUAL REPORTORIAL REQUIREMENTS THROUGH eFAST
MARCH 30, 2022
SEC ISSUES GUIDELINES ON THE DISQUALIFICATIONS OF DIRECTORS, TRUSTEES & OFFICERS PURSUANT TO THE REVISED CORPORATION CODE OF THE PHILIPPINES
MARCH 2, 2022
SEC Memorandum Circular No. 4 Series of 2022 promulgates the disqualifications of directors, trustees, and officers of corporations, and the guidelines on the procedure for their removal.
Highlights include managing the corporation in case of removal as well as jurisdiction, mechanics, and processes involved to hear and decide independently the administrative actions for removal.
SEC IMPLEMENTS BSP CIRCULAR NO. 1133 SERIES OF 2021 ON THE CEILING ON INTEREST RATES & OTHER FEES CHARGED BY LENDING COMPANIES (LCs), FINANCING COMPANIES (FCs) & THEIR ONLINE LENDING PLATFORMS (OLPs)
MARCH 1, 2022
SEC Memorandum Circular No. 3, Series of 2022 provides for the ceiling/s on interest rates and other fees charged by LCs, FCs, and their OLPs pursuant to BSP Circular No. 1133.
Highlights include:
a. Applicable ceiling/s on interest rates and other fees for specific loans offered by LCs, FCs, and their OLPs.
b. Submission of Business Plan indicating the company’s loan products and services as well as the applicable pricing parameters.
c. Imposition of penalties for non-compliance.
SEC CLARIFIES RULES ON CALLING OF SPECIAL STOCKHOLDERS’ MEETING OF A PUBLICLY LISTED COMPANY (PLC)
APRIL 23, 2021
SEC Memorandum Circular No. 7 clarifies rules on the calling of Special Stockholders’ Meeting to promote good corporate governance and the protection of minority investors, pursuant to the SEC regulatory power under Section 179(d) of the Republic Act No. 11232, otherwise known as the “Revised Corporation Code of the Philippines” (RCC), and Administrative Order No. 38, Series of 2013.
Highlights include:
a. Any number of shareholders of a corporation (“Qualifying Shareholders”) who hold at least 10% or more of the outstanding capital stock (“Qualifying Shares”) of a Publicly Listed Company (PLC) shall have the right to call for a Special Stockholders’ Meeting, which may be done physically or remotely through allowable means of remote communication.
b. Qualifying Shareholders should have continuously held the Qualifying Shares for a period of at least one (1) year prior to the receipt by the Corporate Secretary of a written Call for a Special Stockholders’ Meeting.
c. Call for a Special Stockholders’ Meeting shall be in writing, signed by all Qualifying Shareholders, addressed to the Board of Directors, and transmitted through the Corporate Secretary at least 45 days prior to the proposed date of the special meeting, setting forth the following: (1) the names of the Qualifying Stockholder(s) and their respective percentage of shareholdings; (2) the purpose of the Call for a Special Stockholders’ Meeting; (3) the proposed date and time of the requested Special Stockholders’ Meeting; and (4) the proposed agenda items to be discussed during the Special Stockholders’ Meeting.
d. The Board of Directors shall determine if the objectives and conditions in the Call for Special Stockholders’ Meeting are consistent with the requirements of this Memorandum Circular.
e. The Qualifying Stockholder/s may avail of the remedy if the Board of Directors fails to respond to the Call for Special Stockholders’ Meeting within twenty (20) days from receipt of the request.
f. Any officer or agent of the corporation who shall refuse to allow a Qualifying Shareholder to exercise his/her right to call a meeting shall be liable under Section 158 of the RCC, which provides that if after due notice and hearing, the Commission finds that any provision of this Code, rules or regulations, or any of the Commission’s orders has been violated, the Commission may impose any or all of the administrative sanctions enumerated, taking into consideration the extent of participation, nature, effects, frequency, and seriousness of the violation.
SEC NOTICE ON THE IMPLEMENTATION OF ELECTRONIC SIMPLIFIED PROCESSING OF APPLICATION FOR REGISTRATION OF COMPANY (eSPARC)
APRIL 16, 2021
In an Advisory, the SEC advised the implementation of Electronic Simplified Processing of Application for Registration of Company (eSPARC). Starting April 19, 2021, all applications for registration of domestic corporations must be filed and processed under the new company registration system, which can be accessed through https://secwebapps.sec.gov.ph/application. This covers One Person Corporations (OPCs) and domestic corporations, both stock and non-stock, with at least two (2) but not more than 15 incorporators. Meanwhile, applications for the registration of partnerships and foreign corporations will continue to be accepted and processed under the Company Registration System (CRS). The option to register a “Stock Corporation” or “Non-Stock Corporation” in the CRS will also be disabled. Furthermore, applications for registration submitted under the CRS before 19 April 2021 will still be processed therein, unless the applicant is notified by the SEC Processing Officer to resubmit the application using the eSPARC. In this light, applicants are advised to check their email accounts for notifications on the status of their applications.
SEC NOTICE ON THE USE OF ELECTRONIC SIGNATURE FOR THE SUBMISSION OF AFS DURING ECQ PERIOD
APRIL 8, 2021
In an Advisory, the SEC reiterates its earlier pronouncement allowing electronically signed AFS for submission using the Online Submission Tool (OST). SEC has issued the notice in response to the request of the public regarding the use of electronic signatures due to the issue of mobility and restrictions.
SEC EXTENDS THE DEADLINE FOR THE SUBMISSION OF 2021 GIS
MARCH 31, 2021
In a Notice, the SEC has advised that due to the implementation of the enhanced community quarantine and given the implementation of the Online Submission Tool (OST) for the submission of reports online as provided under SEC Memorandum Circular No. 3, Series of 2021, the Commission extends the deadline for the submission of the GIS and reiterates the interim filing procedures. The deadline and filing procedures provided herein shall be observed for the submission of the GIS to the SEC Main Office and Extension Offices by the corporations mentioned in this Notice. For all corporations, whether stock or non-stock, the GIS shall be submitted within ninety (90) calendar days after the Annual Stockholders Meeting or Annual Members’ Meeting of the Directors, Trustees, and Officers of the corporation, as fixed in the By-Laws or as determined by the Board of Directors/Trustees. This will also apply to those corporations mentioned under Item No. 1 (a) of this Notice.
SEC ISSUES THE SCHEDULE & PROCEDURE FOR THE FILING OF 2021 AFS, GIS & OTHER COVERED REPORTS
MARCH 9, 2021
SEC Memorandum Circular No. 3, Series of 2021 provides for the Schedule and Procedure for the Filing of 2021 Audited Financial Statements (AFS), General Information Sheet (GIS), and other Covered Reports.
Highlights include:
a. Corporations may start using the Online Submission Tool (OST) to submit their AFS, GIS, and other annual reports to the SEC starting March 15, 2021. The circular contains the initial list of covered reports during the initial implementation. SEC will no longer require hard copies of the reports submitted through the portal. OST is part of the ongoing digital transformation of the SEC aligned with the Ease of Doing Business and Efficient Government Service Delivery Act of 2018 and the implementation of the Revised Corporation Code.
b. All stock corporations are required to submit their reports using the OST, while non-stock corporations have the option to submit their reports over the counter. Service providers, such as law, consultancy, and other firms, may also enroll as authorized filers.
c. The circular provides for the enrolment procedure. The online facility will show the required format of the report to be submitted and quality check-up upon submission. Upon successful submission, reports will be made available to the public through OST. Submissions made through email, mail, or courier, and drop boxes in SEC offices will no longer be accepted once the OST goes live.
d. SEC extension offices outside the National Capital Region will only accept reports over the counter if the filer encountered problems during the enrolment or submission process. The filer will have to present the corresponding notice generated by the OST. SEC will set up OST Kiosks in SEC offices and other designated areas to provide users with technical assistance.
e. The circular also provides for the deadlines for the submission of AFS in accordance with the numerical digit of SEC registration or license numbers.
SEC ISSUES BENEFICIAL OWNERSHIP TRANSPARENCY GUIDELINES
JANUARY 29, 2021
SEC Memorandum Circular No. 1, Series of 2021 circularizes the guidelines for preventing the misuse of corporations for illicit activities through the measures designed to promote transparency of beneficial ownership.
Highlights include:
a. Prohibition against the issuance/sale/public offering of bearer shares/bearer share warrants
b. Disclosure and recording of the alienation, sale, or transfer of shares in the stock and transfer book of the issuing corporation
c. Mandatory non-payment of dividends to any person or entity unless his/her/its name appears in the records of the corporation as the owner of the shares of stock for which dividends are being paid
d. Mandatory disclosure of the person on whose behalf the corporation is registered and the nominators/principals of nominee incorporators/first directors/trustees and shareholders of corporations applying for registration
e. Mandatory disclosure of nominators/principals/persons on whose behalf one acts as director/trustee/shareholder of existing corporations
f. Period to submit disclosure statement under Section 7 of this Circular
g. Exemption from Disclosure Requirements
h. Submission to the Commission of the required information under Sections 6 and 7 of this Circular which shall be done online in such form and manner as the Commission deems practicable
i. Data Handling and Management of Information and Communication Technology (ICT) of the Commission wherein the latter shall electronically acknowledge receipt of the disclosures required to be submitted online under these Guidelines
j. Beneficial Ownership as part of corporate records
SEC ADVISORY ON ONLINE & MANUAL SUBMISSION OF NOTICE TO RETAIN SPECIFIC CORPORATE TERM
JANUARY 13, 2021
The Securities and Exchange Commission (SEC) reminds the public to electronically file their Notice to Retain Specific Corporate Term on or before February 23, 2021, through the designated e-mail mc22_s2020@sec.gov.ph. Hard copies must also be filed through the Company Registration and Monitoring Department (CRMD) for the issuance of the Certificate of Filing Notice to Retain Specific Corporate Term. Corporations that fail to submit shall be deemed to have selected a perpetual term.
It may be recalled that existing corporations registered prior to the effectivity of the Revised Corporation Code on February 23, 2019, shall be deemed to have perpetual existence, unless the corporation elects to retain its specific corporate term.
SEC PROVIDES REGULATORY RELIEF ON NON-IMPOSITION OF FINES & OTHER MONETARY PENALTIES FOR NON-FILING, LATE FILING & NON-COMPLIANCE WITH THE COMPULSORY NOTIFICATION & OTHER REPORTORIAL REQUIREMENTS
NOVEMBER 15, 2020
SEC Memorandum Circular No. 31, Series of 2020 provides for regulatory relief to business entities in the form of non-imposition of monetary penalties as result of non-filing, late filing, and non-compliance with the compulsory notification and other reportorial requirements during the Community Quarantine (CQ). This regulatory relief is implemented in compliance with the provisions of Bayanihan 2.
Highlights include:
1. The circular covers non-filing and late filing of General Information Sheet (GIS) and Audited Financial Statements (AFS) including other reportorial requirements that the Commission may require, and non-compliance with compulsory notification.
2. No imposition of fines and other monetary penalties will be imposed for violations incurred from September 14, 2020, until December 19, 2020.
3. Corporations may still apply for monitoring from September 2020 until December 2020 to secure monitoring clearance.
4. All other violations incurred outside the covered period will result in the computation of fines and penalties.
5. The circular also applies to Foreign Corporations except on matters pertaining to Securities Deposits and Change of Resident Agent.
SEC ISSUES GUIDELINES ON THE REVISION OF THE GIS OF FOREIGN CORPORATIONS TO INCLUDE BENEFICIAL OWNERSHIP INFORMATION
NOVEMBER 5, 2020
SEC Memorandum Circular (MC) No. 30, Series of 2020 provides for the guidelines on the revision of the General Information Sheet (GIS) of Foreign Corporations to include Beneficial Ownership Information.
Highlights include:
1. All SEC-registered foreign corporations, both stock and non-stock, are required to disclose their beneficial owners.
2. Any changes in beneficial ownership information shall be included in the Notification Update Form, to be submitted within 30 days after such occurrence.
3. Failure to disclose and exercise due diligence required in ensuring compliance with the requirements, without any lawful cause, will be penalized in accordance with Section 11 of SEC MC No. 15, Series of 2019.
SEC REQUIRES OFFICIAL CONTACTS
OCTOBER 27, 2020
SEC Memorandum Circular No. 28, Series of 2020 provides the requirements and guidelines for the creation and/or designation of an official e-mail account and cellphone number for transactions with the Commission to facilitate and expedite the transmission and receipt of official communications.
Highlights include
1. Every person under the jurisdiction and supervision of the Commission shall submit a valid official and alternate e-mail address and cellphone number within 60 days from the effectivity of these rules. The e-mail addresses and cellphone numbers shall be under the control of duly authorized representative such as the corporate secretary, person charged with the administration and management of the corporation sole, resident agent of the foreign corporation, managing partner, among others. Updates shall be filed within five (5) days from the change along with the authorization or certification of authorization.
2. Beginning February 23, 2021, the e-mail address and cellphone numbers shall be included in the General Information Sheet (GIS) or Notification Update Form (NUF) for foreign corporations. Submission will be online and accompanied by a duly signed Authorization or Certificate of Authorization. A Multi-Factor Authentication (MFA) utilizing mechanisms such as One-Time Password (OTP) scheme or Two-Step Verification by a Software Based Authenticator will be in place for every transmittal for security purposes.
3. Beginning February 23, 2021, failure to submit in accordance with the foregoing, shall be imposed with a penalty amounting to Php 10,000.
SEC ISSUES GUIDELINES ON THE CONVERSION OF CORPORATIONS EITHER TO OPC OR TO ORDINARY STOCK CORPORATION
OCTOBER 14, 2020
SEC Memorandum Circular No. 27, Series of 2020 provides the guidelines for the conversion of corporations either to One Person Corporation (OPC) or to Ordinary Stock Corporation.
The circular covers the specific guidelines, documentary requirements, effects, and related consequences as well as governing law after the conversion.
SEC ISSUES GUIDELINES ON THE FILING, INVESTIGATION & RESOLUTION OF COMPLAINTS FOR VIOLATION OF RIGHTS TO INSPECT AND/OR REPRODUCE CORPORATE RECORDS
SEPTEMBER 11, 2020
SEC Memorandum Circular No. 25, Series of 2020 sets out the guidelines for the filing of resolution of complaints for violation of rights granted under Section 73 of Republic Act (R.A.) No. 11232 or the Revised Corporation Code of the Philippines.
Highlights include:
a. A verified complaint containing the information of the company and the relevant facts and circumstances on the violation of the right to inspect and/or reproduce corporate records may be filed with Company Registration and Monitoring Division or any of the Extension Offices of the SEC, with payment of filing fee.
b. A Summon shall be issued by SEC within five (5) days from filing of the verified complaint.
c. A Verified Answer must be filed within ten (10) days from receipt of the summon.
d. A clarificatory conference or hearing may be conducted not later than thirty (30) days after the filing of verified answer.
e. An amicable settlement or withdrawal of complaint may be done by the complainant and respondent, which shall be agreed and signed by both parties.
f. A final order will be issued thirty (30) days after the conclusion of the clarificatory conference.
g. A Verified Status Accounts (VSA) must be complied within fifteen (15) days after receipt of final order.
h. A second clarificatory conference may be conducted before the issuance of final Resolution.
i. A Resolution will be issued within thirty (30) days from receipt of VSA.
SEC PRESCRIBES ADDITIONAL GUIDELINES ON POSTING OF SECURITIES DEPOSIT, SUBSTITUTION OF SECURITIES DEPOSIT & CHANGE OF RESIDENT AGENT OF FOREIGN CORPORATIONS
AUGUST 25, 2020
SEC Memorandum Circular No. 24 Series of 2020 provides additional guidelines on posting of securities deposit, substitution of securities deposit, and change of resident agent of foreign corporations. The circular was issued to complement the previous extension deadlines for the filing of securities deposit and Audited Financial Statements of foreign corporations because of COVID pursuant to the provisions of the Revised Corporation Code and Bayanihan to Heal as One Act.
SEC ISSUES GUIDELINES ON THE CHANGE OF CORPORATE TERM PURSUANT TO THE REVISED CORPORATION CODE
AUGUST 18, 2020
SEC Memorandum Circular No. 22, Series of 2020 provides the guidelines on the change of corporate term pursuant to Section 11 of the Revised Corporation Code (RCC).
Highlights include:
a. Corporations incorporated under the RCC shall have perpetual existence unless its Articles of Incorporation (AOI) provide a specific corporate term.
b. Corporations whose Certificate of Incorporation were issued prior to the effectivity of the RCC, and which continue to exist shall be deemed perpetual upon the effectivity of the RCC, without any action on the part of the corporation.
c. If the corporation incorporated prior to the effectivity of the RCC elects to retain its current corporate term, it should notify the Commission by filing a notice with attached Directors’ Certificate certifying that the decision was approved in a meeting held for the purpose by majority vote of the Board of Directors/Trustees and by a vote of the stockholders representing a majority of the outstanding capital stock, including non-voting shares, or a majority of the members, in case of non-stock corporations. The notice, which is attested by the Corporate Secretary, should be submitted to the SEC within a period of two (2) years or until February 23, 2021. Otherwise, failure to comply shall deem the corporation of having perpetual existence.
d. Corporations incorporated under the RCC whose Articles of Incorporation provide for specific term and existing corporations that opted to retain its current corporate term may file an amendment (i.e., extend or shorten the corporate term, change the specific corporate term to perpetual corporate term and vice versa) which must be approved by a vote or written assent of majority of the Board of Directors/Trustees and a vote of stockholders representing at least 2/3 of the outstanding capital stock of the corporation. Any change in the corporate term shall be without prejudice to the appraisal right of dissenting stockholders in accordance with the provisions of the RCC.
SEC RESUMES OPERATIONS IN THE MAIN OFFICE AND ADJUSTS DEADLINES FOR ANNUAL REPORTS
JUNE 30, 2020
In an advisory, the SEC has informed the public on the following:
a. Opening of SEC Main Office in PICC, Pasay City on July 1, 2020, Wednesday
b. Acceptance of Audited Financial Statements (AFS) and General Information Sheet (GIS) through SEC Express Nationwide Submission (SENS) facility, which allows for submission of reports through courier or registered mail
c. Adjusted deadlines for the filing of AFS based on SEC registration numbers
d. Adjusted deadlines for the filing of GIS. Corporations which held their annual stockholders’ meetings during the Enhanced Community Quarantine and Modified Enhanced Community Quarantine in the National Capital Region may submit their GIS until August 31, 2020, without incurring penalties.
e. Alternative modes of filing AFS and GIS to dedicated e-mail address or submission to SEC Extension Offices
SEC MEDIA RELEASE ON THE DISQUALIFICATION OF EXTERNAL AUDITOR OF R&L INVESTMENTS
JULY 27, 2020
The Commission has informed the public on the disqualification of the external auditor of R&L Investments from securing accreditation due to gross negligence over a scheme that resulted in the collapse of the brokerage R&L Investments, Inc. Aside from disqualification, the auditor was ordered to pay Php 314,570.65 as a penalty for material disclosure deficiencies and misstatements, as well as for violation of independence rules. Subsequently, the Commission ordered the Capital Markets Integrity Corporation (CMIC) to take over the operations of R&L Investments to protect the affected customer accounts.
Failure to flag the misappropriation of securities through conduct of appropriate procedures not only contributed to the continuation of illegal acts which resulted in the massive loss of securities belonging to several investors but also created a negative impact on the investor’s confidence to the Philippine stock market. The auditor admitted that he relied on the BP Portfolio Report furnished by R&L Investments, which turned out to be altered, and accepted the same as audit evidence to validate the information in the brokerage’s Inventory Report. According to the SEC, the auditor should have rejected the documents as audit evidence and initiated additional audit procedures considering that it has identified weaknesses in R&L Investments’ control environment. Lastly, it was also found that the auditor himself prepared the audited financial statements of R&L Investments, in violation of the independence requirement for external auditors.
SEC ADVISORY ON THE OPENING OF SEC SENS IN RELATION TO THE UPCOMING FILING OF AFS & GIS
MAY 21, 2020
In relation to SEC Memorandum Circular No. 18, Series of 2020 regarding the orderly filing of the Audited Financial Statements (AFS) and General Information Sheet (GIS), the Commission has announced the following:
1. Opening of the following SEC services to the public starting June 1, 2020:
1.1 SEC Express System-for the request of SEC documents, plain or authenticated copy, facilitated thru online or call center.
1.2 SEC Express Nationwide Submission (SENS)-for submission of SEC reportorial requirements such as AFS and GIS, thru courier and/or post office.
2. Request for documents shall be done online and thru call center. Appointment System will still be suspended, and the public is not allowed to go to SEC Head Office to request for SEC documents. Delivery of documents shall be done five (5) to seven (7) days after payment confirmation.
3. Submission of AFS and GIS in hard copy must be in three (3) sets through the SENS. Filers will not be allowed to go to SEC Head Office or Satellite Offices to file their reports.
4. Companies with principal office address near any of the SEC Extension Offices (EO), shall file their reports to the nearest EO.
5. All Satellite Offices shall be temporarily closed for receipt of reports since all submissions shall be through SENS.
6. Electronic submission of AFS and GIS are allowed in reference to SEC Memorandum Circular No. 10, Series 2020 and SEC Notice dated April 8, 2020.
SEC PROCEDURES IN THE FILING OF AFS & GIS AFTER ECQ
MAY 11, 2020
SEC Memorandum Circular (MC) No. 18, Series of 2020 provides SEC procedures in the filing of Audited Financial Statements (AFS) and General Information Sheet (GIS) after Enhanced Community Quarantine (ECQ).
Highlights include:
a. New procedures are introduced to protect SEC personnel from COVID-19.
b. All corporations, including Branch Offices, Representative Offices, Regional Headquarters, and Regional Operating Headquarters of foreign corporations, shall file their AFS and GIS thru the SEC Express Nationwide Submission (SENS) to any courier of their choice and/or postal office.
c. The date of mailing, as shown by the registry receipt of the courier, shall be considered as the reckoning date of submission. For reports filed through registered mail in the postal office, the reckoning date of receipt shall be the date of receipt by postal office. For reports filed through email during ECQ, the reckoning date of receipt shall be the date stated in the Acknowledgement Confirmation stated in the email.
d. All corporations with principal office under the jurisdiction of any of SEC Extension Offices (EO), shall file their reports to the nearest EO.
e. All SEC satellite offices shall be temporarily closed for receiving of reports. All filings shall be delivered to the SEC Head Office in PICC.
f. AFS, other than the consolidated FS, shall have the stamp "received" by the BIR.
g. Date of filing shall be dependent on the last numerical digit of SEC registration or license number in accordance with the specific schedules provided in the circular.
SEC EXTENDS THE DEADLINE FOR THE SUBMISSION OF AFS FOR THOSE WITH FISCAL YEAR ENDING JANUARY TO APRIL 2020
MAY 7, 2020
SEC Memorandum Circular (MC) No. 17, Series of 2020 extends the deadline for the submission of Audited Financial Statements (AFS), Annual, and Quarterly Reports of companies, publicly listed or not, with fiscal year ended January 31 to March 31, 2020, for a period of 60 calendar days from the regular filing deadlines. For those companies with fiscal year ended April 30, 2020, the extended deadline is for a period of 45 calendar days from the regular filing deadline.
SEC RELAXES THE GUIDELINES ON THE COMPANY REGISTRATION
APRIL 29, 2020
SEC Memorandum Circular (MC) No. 16 Series of 2020 provides the guidelines on the Authentication of Article of Incorporation (AOI) in Applications for Registration of New Domestic Corporations. The guidelines are aligned with the mandate of the Revised Corporation Code (RCC) as part of easing of doing business in the Philippines.
Highlights include:
a. SEC will accept for the registration of AOI that is accompanied by a Certificate of Authentication signed by all incorporators in the prescribed form.
b. Both the AOI and the Certificate of Authentication will no longer have to be notarized or consularized.
c. Incorporators may choose to acknowledge the AOI before a Notary Public. If executed outside the Philippines, the AOI may be apostilled or notarized or authenticated by a Philippine diplomatic or consular officer.
d. In the case of a domestic corporation with more than 40% foreign equity, the application for registration of investments of non-Philippine nationals using SEC Form F-100 must be apostilled or notarized or authenticated by a Philippine diplomatic or consular officer only if the same is executed outside the country.
e. Registration of a corporation, which has procured its Certificate of Registration through fraud or misrepresentation, shall be revoked.
f. Those responsible for the formation of the said corporation or who assisted directly or indirectly therein shall be punished with a fine ranging from Php 200,000 to Php 2 Million. When the violation is injurious or detrimental to the public, the penalty shall be a fine ranging from Php 400,000 to Php 5 Million.
g. Willfully certifying incomplete, inaccurate, false, or misleading statements or reports shall likewise be punishable with a fine ranging from Php 20,000 to Php 200,000. When the wrongful certification is injurious or detrimental to the public, the responsible person may be punished with a fine ranging from Php 40,000 to Php 400,000.
h. Liability for such offenses shall be separate from any other administrative, civil, or criminal liability provided under the RCC and other laws.
SEC APPROVES RULES EMPOWERING MINORITY INVESTORS OF LISTED FIRMS TO PUT ITEMS ON THE AGENDA FOR REGULAR/SPECIAL STOCKHOLDERS MEETING PURSUANT TO RCC
APRIL 28, 2020
SEC Memorandum Circular (MC) No. 14 Series of 2020 allows minority shareholders of publicly listed companies to put items on the agenda for regular or special stockholders’ meeting. The rules are aligned with the mandate of the Revised Corporation Code (RCC) to protect the interest of the minority shareholders, and as part of the SEC undertaking on easing of doing business in the Philippines.
Highlights include:
a. All items added on the agenda after the Definitive Information Statement (DIS) has been filed with the SEC shall be filed under “Other Matters.”
b. Reporting company shall no longer be required to amend its DIS.
c. Administrative sanctions may be imposed under the RCC in case any officer or agent of the corporation unjustly refuses to allow a qualified shareholder to exercise his right to put items on the agenda.
d. If the refusal is made pursuant to a resolution or order of the Board of Directors, the liability for such action shall be imposed upon the directors who voted for such refusal.
e. It shall be a defense to any action that the shareholder exercising any of the rights provided therein was not acting in good faith or for a legitimate purpose.
SEC EXTENDS THE PERIOD TO FILE GFFS OR SFFS AND GUIDELINES ON SUBMISSION BY ELECTRONIC MAIL
APRIL 16, 2020
The SEC has extended the period to file General Form Financial Statements (GFFS) or Special Form Financial Statements (SFFS) as well as provide guidelines on the submission by electronic mail in the light of Enhanced Community Quarantine (ECQ) implementation. It may be recalled that under SEC Memorandum Circular No. 6, Series of 2006, the electronic format of the GFFS or SFFS shall be submitted within thirty (30) days from the last day of submission of the Audited Financial Statements.
SEC ADOPTS RULES ON SALE OF CORPORATE ASSETS OF PUBLICLY LISTED COMPANY
APRIL 15, 2020
SEC Memorandum Circular (MC) No. 12, Series of 2020 provides rules on the sale of corporate assets of publicly listed company, pursuant to the provisions of the Revised Corporation Code.
Highlights include:
1. Sale or disposal amounting to at least 51% of the corporation’s total asset shall be considered as sale of all or substantially all corporate property and assets.
2. Requirement of vote of the stockholders prior to the execution of the sale transaction
3. Requirement of shareholder approval in an aggregate sale transaction
4. Computation to determine whether the sale amounts to at least 51% of the corporation’s assets.
NEW GUIDELINES ON POSTING OF SECURITIES DEPOSIT UNDER ECQ
APRIL 12, 2020
SEC Memorandum Circular (MC) No. 11 Series of 2020 extends the deadline of submission or filing of securities deposit of branch offices of foreign corporations to give relief to the business sector amidst COVID-19 outbreak. A 30-day extension from the lifting of Enhanced Community Quarantine (ECQ) shall be given to entities filing for initial securities deposit, entities required to post additional securities, and entities with matured securities deposit.
SEC ALLOWS ELECTRONIC FILING OF AFS & GIS
MARCH 20, 2020
SEC Memorandum Circular (MC) No. 10, Series of 2020 provides for guidelines on the electronic filing of reportorial requirements in the light of Enhanced Community Quarantine (ECQ).
Highlights include:
a. Submission of General Information Sheet, Audited Financial Statements, and other general and special forms and letters.
b. Designated e-mail will be provided.
c. Documents should be in PDF to contain electronic signature with the e-mail declaration on the authenticity of the documents.
d. Documents may be submitted unnotarized, subject to a separate SEC guideline on notarization and submission, which may be issued after ECQ.
e. Sender to request for a Return Receipt and a Delivery Status Notification to ensure that the e-mail has been sent and received by the SEC.
SEC ISSUES GUIDELINES IN THE FILING OF THE GIS UNDER COVID-19
MARCH 18, 2020
SEC Memorandum Circular (MC) No. 9-2020 provides the guidelines in the filing of General Information Sheet (GIS) during COVID-19 Enhanced Community Quarantine (ECQ), with the intention of easing the burden on the business sector.
Highlights include the filing guidelines on the following occasions:
a. If election of directors, trustees, and officers was held.
b. If annual meeting and election of directors, or officers is not held due to health and safety reasons relating to the COVID 19 disease.
c. Non-holding of annual meeting and election due to other causes.
d. Report of election, non-holding of annual meeting, where no stockholder, member, director, or trustee applied for an order from the SEC that an election be held.
e. Extension coverage
SEC ISSUES GUIDELINES IN HANDLING SEC RECORDS DURING COVID-19
MARCH 16, 2020
SEC Memorandum Circular (MC) No. 7-2020 provides the guidelines in handling SEC records during COVID-19 Enhanced Community Quarantine (ECQ). Highlights include work-around procedures in handling request for plain/authenticated copy of SEC documents as well as filing and submission of reports and/or other documents to SEC.
SEC ISSUES GUIDELINES ON TELECONFERENCING & VIDEOCONFERENCING AS MEANS OF COMMUNICATION IN MEETINGS
MARCH 12, 2020
SEC Memorandum Circular (MC) No. 6-2020 provides the guidelines on the attendance and participation in meetings through teleconferencing and videoconferencing as means of communication, pursuant to the provisions of the Revised Corporation Code of the Philippines.
Highlights include:
a. Guidelines shall apply to all corporations registered with SEC.
b. Directors/trustees can participate and vote through remote communication but cannot attend or vote by proxy at board meetings.
c. Notification in advance to the Presiding Officer and the Corporate Secretary is necessary and the Corporate Secretary shall note in the Minutes of Meeting.
d. Directors/trustees who participate through remote communication shall be deemed present for the purpose of attaining quorum.
e. Notice of meetings may be sent to all directors/trustees through electronic mail, messaging service, or such other manner as may be provided in the By-Laws or Board Resolution.
f. Directors/trustees participating via remote communication may cast his vote through electronic mail, messaging service, or such other manner as may be provided in the internal procedures.
g. Vote shall be sent to the Presiding Officer and the Corporate Secretary for notation.
h. Should an interruption or stoppage occur, the recording shall restart from the point where it was stopped or interrupted with proper statement of points in time.
i. Those who attended the meeting through remote communication are required to sign the minutes of the meeting whenever the act of signing is practicable.
j. The right to vote of stockholders/members may be exercised in person, through a proxy, or when so authorized in the By-Laws, through remote communication or in absentia.
SEC MEMORANDUM CIRCULAR ON NOTICE OF REGULAR MEETINGS OF STOCKHOLDERS/MEMBERS UNDER THE REVISED CORPORATION CODE
FEBRUARY 1, 2020
SEC Memorandum Circular No. 3, Series of 2020 circularizes the rules on notice of regular meetings of the stockholders/members. The SEC may impose any or all the sanctions as provided under Section 158 of the Revised Corporation Code (RCC) for any violation of this circular, after due notice and hearing.
SEC REQUIRES SUBMISSION OF THE REVISED MANDATORY DISCLOSURE FORM FOR NON-PROFIT ORGANIZATIONS
DECEMBER 27, 2019
SEC Memorandum Circular No. 25-2019 provides the guidelines for the protection of SEC-registered Non-Profit Organizations (NPOs) from money laundering and terrorist financing abuse.
Highlights of the circular include:
1. Ensures that NPOs are not misused by terrorist organizations.
2. SEC to formulate risk-based measures, in coordination with the Anti-Money Laundering Council, to protect NPOs from identified threats of money laundering and terrorism financing.
3. SEC thrust is to promote transparency by requiring a sort of accreditation or similar listing to qualified NPOs based on the material information to be supplied such as financing sources, expenses, projects, activities, those who control or direct activities, composition of the governing boards, and beneficial owners.
4. Adaption of policies on good governance based on the following characteristics, among others: (a) organizational integrity in the form of the oversight function of the Board of Trustees (BOT) on matters involving the establishment of strong financial and human resource policies; (b) partner relationships by setting expectations and responsibilities with partners as well as disclosures of application of funds and post disbursement audit requirements; (c) financial accountability and transparency by coming up with monitoring system on the application of funds intended for the purpose and readily available to the public; (d) record keeping and program planning and internal control set-up and monitoring
5. Adaption of an internal audit system by establishing an audit committee or appointing a responsible officer who will ensure high standards and best practices for NPOs as enumerated in the circular.
6. Imposition of compliance requirements enumerated in the circular to identified NPOs at risk.
7. Adaption of preventive measures enumerated in the circular for those identified NPOs at risk.
8. Mandatory submission of the Revised Mandatory Disclosures for all SEC-registered Non-Stock Corporations within 60 days from December 27, 2019. Corporations that have already submitted pursuant to SEC MC No. 15-2018 on or before July 31, 2019, shall be deemed to have complied with the requirement subject to additional information as may be required by SEC based on the revised disclosure form. Newly established non-stock corporations are required to comply within six (6) months from their registration.
9. Non-compliance may result in the revocation of Certificate of Incorporation as well as further investigation by SEC. Penalties may also be imposed on those who submit untrue statement of a material fact or omission of material fact and refused to permit any lawful examination. Inclusion of Non-stock Corporation in the UN Sanctions List as well as NPOs whose trustees and/or officers knowingly allowed the NPO to be used for money launder or terrorism purposes shall be a ground for revocation of its Certificate of Incorporation.
SEC REVISES THE GUIDELINES ON POSTING OF SECURITIES FOR RESIDENT FOREIGN CORPORATIONS PURSUANT TO RCC
AUGUST 6, 2019
SEC Memorandum Circular (MC) No. 17, Series of 2019 supersedes SEC MC No. 2, Series of 2012, which provides the revised guidelines on posting of securities deposit of branch office of a foreign company. Under the revised guideline, it now includes Philippine government debt instruments or equity instruments as types of acceptable securities. It also excludes Regional Operating Headquarters (ROHQ), Regional Headquarters (RHQ), and Representative Offices in posting the necessary securities. As regards the value of securities to be posted, it is now required under the Revised Corporation Code (RCC) that securities with an actual market value of Php 500,000 be posted with the SEC within 60 days after the issuance of SEC License. While the securities are deposited with the SEC, the branch office is entitled to collect the interest or dividends on the said securities.