September 3, 2024 | 12:00am
MANILA, Philippines — The Securities and Exchange Commission (SEC) is looking at incentives to entice corporations to comply with reportorial requirements.
After the successful implementation of an amnesty program last year, the SEC issued on Aug. 30 a memorandum circular providing for the Enhanced Compliance Incentive Plan (ECIP).
The incentive program allows corporations that have failed to submit their annual reports on time to restore their good standing.
“As a regulator, the SEC is committed to ensuring that entities under its supervision are compliant with all the laws, rules and regulations applicable to them,” SEC chairperson Emilio Aquino said.
Aquino said the regulator has strictly imposed higher revised fines and penalties after the SEC Amnesty Program to encourage strict and habitual compliance with reportorial obligations and good corporate housekeeping.
“With the launch of ECIP, we are affording corporations under our supervision another opportunity to remedy their violations, at lower fees, and restore their good standing,” he said.
Under the ECIP, non-compliant corporations, including those placed under “delinquent” status, may settle their unassessed or unpaid fines and penalties for P20,000.
Suspended and revoked corporations, including those with pending petitions for the lifting of the suspension or revocation order issued against them, meanwhile, may settle only 50 percent of the assessed fines and pay the petition fee of P3,060.
According to the SEC, the significantly lower rates apply to fines and penalties imposed on corporations for violations such as non-filing and late filing of general information sheet (GIS) for the latest and prior years as well as non-filing and late filing of financial statements (AFS).
The ECIP also covers violations under an SEC memorandum circular requiring all entities registered with the commission to designate and submit their official and alternative email addresses and mobile phone numbers.
The SEC added that stock and non-stock corporations may avail themselves of the ECIP, except for those whose securities are listed on the Philippine Stock Exchange and those whose securities are registered but not listed on the PSE.
Corporations that are considered as public companies, with intra-corporate dispute, with disputed GIS, with expired corporate term and covered under Section 17.2 of the Securities Regulation Code are also not eligible to avail themselves of the ECIP.
However, the SEC said that payment of the ECIP fee in itself does not automatically confer “compliant” status to availing corporations or lift the suspension and revocation of their certificates of incorporation.
The commission said the applicants are still required to submit corresponding supporting documents.
Corporations with suspended or revoked certificates of incorporation, on the other hand, must submit a petition to lift order of suspension/revocation of certificate of registration, along with supporting documents such as their latest due AFS and GIS, MC28 compliance, secretary’s certificate of no intra-corporate controversy, latest mayor’s or business permit and certificate of registration with the Bureau of Internal Revenue.
“Should an applicant-corporation fail to submit the complete set of requirements within the prescribed period, the ECIP fees, as well as the initial petition fee of P3,060 applicable to suspended and revoked corporations, shall be forfeited,” it said.
The applications of non-compliant, suspended and revoked corporations for ECIP may be submitted from Sept. 2 to Nov. 30 this year.
Non-compliant corporations include those that have not submitted their GIS and AFS intermittently or consecutively in previous years, while delinquent corporations are those that have failed to file their AFS or GIS for three times, consecutively or intermittently, within a period of five years.
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