SEC UPDATES

  1. Subject: 2024 Filing of Annual Financial Statements and General Information Sheet
    SEC MC. No. 02, S. 2024
    Date Issued: 06 February 2024
    Link: https://www.sec.gov.ph/mc-2024/sec-mc-no-02-series-of-2024/#gsc.tab=0

    Corporations whose fiscal year ended on 31 December 2023 shall file their Audited Financial Statements (“AFS”) through eFAST. The deadlines for filing the AFS shall be determined according to the last numerical digit of their SEC registration or license numbers, in accordance with the following schedule:
     

    Submission Dates Last Digit of Sec Registration/License
    Number
    April 29, 30, May 2, 3, 6, 7, 8, 9, 10 1 and 2
    May 13, 14, 15, 16, 17, 20, 21, 22, 23, 24 3 and 4
    May 27, 28, 29, 30, 31, June 3, 4, 5, 6, 7 5 and 6
    June 10, 11, 13, 14, 17, 18, 19, 20, 21 7 and 8
    June 24, 25, 26, 27, 28, July 1,2,3,4,5 9 and 0

    The above filing schedule shall not apply to the following corporations: (1) Those whose fiscal years end on a date other than 31 December 2023; (2) Those whose securities are listed on the PSE, those whose securities are registered but not listed on the PSE, those considered as public companies, and other entities covered under Sec.17.2 of the Securities Regulation Code (“SRC”); (3) Those whose AFS are being audited by the Commission on Audit (“COA”).

  2. Subject: Guidelines on the use of eAmend Portal
    SEC MC. No. 3, S. 2024
    Date Issued: 19 February 2024
    Link: https://www.sec.gov.ph/mc-2024/sec-mc-no-03-series-of-2024/#gsc.tab=0

    This covers applications with the Corporate and Partnership Registration Division (CPRD) of the SEC.

    The following amendments shall be processed as follows:
     

    Applications for amendment concerning the ff. provisions shall be subject to Issuance of Digital Certificate Applications for amendment concerning the ff. provisions shall be subject to Regular Processing through the eAMEND Portal

    Section 1.A

    1. Articles of Incorporation (“AOI”)
      1. Change in Principal Office Address
      2. Increase/Decrease in number of Board of Directors
      3. Fiscal Year for One Person Corporations (“OPC”)
      4. Deletion and/or Addition of New Provision in the Existing Articles of Incorporation except those provisions on purposes, capitalization and reclassification of shares. (Section 1.A.a)
    2. By-Laws:
      1. Date of Annual Meeting of the stockholders/members;
      2. Fiscal year (Section 1.A.b)

    Section 1.B

    1. Amendment of Partnership;
    2. Dissolution of Partnership;
    3. Amendment of the AOI of a Domestic Corporation, whether stock or non-stock, other than those indicated in Section 1.A.a;
    4. Amendment of the By-Laws of a Domestic Corporation whether stock or non-stock other than those indicated in Section 1.A.b;
    5. Application for Conversion of OPC to Ordinary Stock Corporation and vise-versa;
    6. Application for Increase of Capital Stock for OPC via cash;
    7. Combination of any of Section 1.A and 1.B
        

    All other applications not included in the list above shall be filed through the Official electronic email platforms of the Commission and/or its Extension offices.

    The documentary requirements for these applications are available here.

  3. Subject: Securing & Expanding Capital for PowerGen Operators & Wholesale Electricity & Retail Services (SEC POWERS)
    SEC MC No. 04, S. 2024
    Date Issued: 22 February 2024
    Link: https://www.sec.gov.ph/mc-2024/sec-mc-no-04-series-of-2024/#gsc.tab=0

    Republic Act No. 9136, also known as the “Electric Power Industry Reform Act of 2001,” requires power generation companies (“PowerGen”) and distribution utilities (“DU”) which are not publicly listed to offer and sell not less than fifteen percent (15%) of their common shares of stocks to the public. Thus, the SEC, by virtue of its power under the SRC, issued these guidelines.

    In summary, PowerGen and DUs shall follow these steps in offering or selling their common shares:

    1. All clearances from the pertinent operating departments (CRMD, CGFD, OGC, EIPD and OGA) of the Commission shall be secured and/or completed prior to the filing of an Registration Statement (“RS”) with the Department;

    2. The registrant shall provide the required financial information and disclosures in accordance with the Revised SRC Rule 68 and the Philippine Financial Reporting Standards and other relevant issuances of the Commission;

    3. Registrant shall present to the OGA its financial statements for pre-evaluation in order to determine basic compliance with the Revised Rule 68;

    4. The registrant shall send digital copies to [email protected] in word and PDF format the documentary requirements;

    5. If the application is accepted for processing by the Department, registrant shall submit two (2) sets of hard copies of all documents required above and shall pay the required fees, secure from the Department a copy of the Notice of Filing of the RS, upload copy of the Prospectus in the company’s official website;

    6. The Commission shall review and declare the RS effective or reject the same within forty-five (45) days after the date of filing with MSRD;

    7. Upon favorable consideration by the Commission En Banc of the registrant RS, the Department shall issue a pre-effective letter stating the conditions to be complied with;

    8. Upon compliance with the requirements the department shall issue an Order of Registration and/or Permit to Sell Securities to the Public;

    9. The sale of the securities via public offering shall commence within ten (10) business days from the date of the effectivity of the RS and shall continue until the end of the offering period or until the sale is terminated by the Issuer. If the sale is not commenced within ten (10) business days, the RS shall be cancelled and all fees paid thereon forfeited.

  4. Subject: Guidelines on the Philippine Sustainable Finance Taxonomy
    SEC MC. No. 05, S. 2024
    Date Issued: 23 February 2024
    Link: https://www.sec.gov.ph/mc-2024/sec-mc-no-05-series-of-2024/#gsc.tab=0

    These guidelines shall be referred to as the “Philippine Sustainable Finance Taxonomy Guidelines (“SFTG”). These guidelines are designed in accordance with the Philippine Sustainable Finance Guiding Principles and crafted to give financial institutions, regulators, and other stakeholders a framework for incorporating environmental, social and governance (“ESG”) factors into their corporate plans and daily operations.

    The following steps outline the process for determining if an economic activity qualifies as environmentally or socially sustainable and whether its financing can be categorized as aligned with the SFTG:

    1. Determine that the activity to be financed is not included in the enumeration of “Excluded Activity” under SFTG and is compliant with Philippine laws.

    2. Select the relevant Environment Objective (EO) of the activity. In assessing the primary objective of the activity, the following factors may be considered: (i) activity relevance and strategic alignment; (ii) investors/financial institutions’ priority; and (iii) government and industry guidance;

    3. Assess whether the activity significantly harms the other EO;

    4. If there is harm, verify that the same has been remediated or will be remediated within the required defined period.

    The details of the Philippine SFTG are provided in the Annex 1 of the Memorandum Circular.

  5. Subject: Updated Fines and Penalties on the Late and Non-Submission of Audited Financial Statements (AFS), General Information Sheet (GIS)
    SEC MC No. 06, S. 2024
    Date Issued: 27 March 2024
    Link: https://www.sec.gov.ph/mc-2024/sec-mc-no-06-series-of-2024updated-fines-and-penalties-on-the-late-and-non-submission-of-audited-financial-statements-afs-general-information-sheet/#gsc.tab=0

    The SEC issued these Guidelines to update the fines and penalties for the late submission of the AFS and GIS in order to encourage compliance with reportorial requirements and maintain an accurate database.

    In relation hereto, the SEC deems it to reiterate the meaning of late filing and non-submission as follows:

    For OPC, Stock and Non-Stock Domestic Corporations, late filing/submission means:

    1. Filing after the due date but still within a year of the prescribed deadline for filing;

    2. Filing beyond one (1) year from the prescribed period, in which case the penalty shall be the base fine for “Non-Filing” and the computation of the monthly penalty shall not exceed twelve (12) months; or

    3. In case of SEC MC 28, submitting beyond thirty (30) calendar days from the issuance of the certificate of registration, license, or authority

    For Stock and Non-Stock Foreign Corporations, late filing/submission means:

    1. The filing after thirty (30) calendar days from the anniversary date of the issuance of the SEC license for GIS or from the prescribed deadline for AFS;

    2. The filing after sixty (60) calendar days from the anniversary date of the issuance of the SEC license for GIS or from the prescribed deadline for AFS, in which case the penalty shall be the base fine of “Non-Filing” and the computation of the monthly penalty shall not exceed twelve (12) months; or

    3. In case of SEC MC 28, submitting beyond thirty (30) calendar days from the issuance of the certificate of registration, license, or authority

    Non-filing means non-submission of the reportorial requirements.

    The scale of fines and penalties is specified in Annex A of SEC MC No. 06, S. 2024

  6. Subject: Removal of the Minimum Commission Charged by PSE Stockbrokers
    Sec MC No. 7, S. 2024
    Date Issued: 17 April 2024
    Link: https://www.sec.gov.ph/mc-2024/sec-mc-no-07-series-of-2024/#gsc.tab=0  

    The Commission has resolved to remove the minimum amount of commission charged by stockbrokers to its customers for each transaction. This is pursuant to R.A. No. 11765, otherwise known as the Financial Products and Services Consumer Protection Act (FCPA), which authorizes financial regulators,     including the SEC, to determine the reasonableness of interest charges or fees which a financial service provider may demand, collect, or receive for any service or product offered to a financial consumer.

  7. Subject: Guidelines for Cornerstone Investors in Initial Public Offerings (IPO)
    SEC MC No. 08, S. 2024
    Date Issued: 11 April 2024
    Link: https://www.sec.gov.ph/mc-2024/sec-mc-no-08-series-of-2024/#gsc.tab=0

    These guidelines are issued pursuant to SEC’s function, and in observation that cornerstone investors have been shown to stimulate investor demand in an IPO, and, for some investors, lend credibility to the company that is proposing to IPO.  Pursuant hereto, a cornerstone investor is an investor in the IPO of a registrant’s shares to whom offer shares are preferentially placed with a guaranteed allocation at the final offer price, provided that, the final offer price is within the offer price range preferred by the cornerstone investor and agreed with the issuer.

    The allocation to a cornerstone investor shall be guaranteed in a cornerstone agreement which must be signed at the latest on or prior to the pricing event of the initial public offering. Cornerstone investment agreements shall form part of the material contracts in the issuer’s registration statement required to be submitted to the Commission.

    The following information pertaining to cornerstone investors shall be disclosed in the issuer’s final prospectus:

    1. Number of participating cornerstone investors and their respective profile descriptions;

    2. Number and type of securities proposed to be issued or offered to cornerstone investors;

    3. Such other information relevant to the cornerstone investment

    The following requirements shall apply whenever an IPO has a cornerstone investor:

    1. Cornerstone investors shall be identified in the final prospectus;

    2. A cornerstone investor’s placing must be at IPO price;

    3. Each cornerstone investor may have representation in the board of the registered issuer, provided it owns the minimum required shares for election.

  8. Subject: SEC Stratbox (Strategic Sandbox)
    SEC MC No. 09, S. 2024
    Date Issued: 25 April 2024
    Link: https://www.sec.gov.ph/mc-2024/sec-mc-no-09-series-of-2024/#gsc.tab=0

    These guidelines are issued by the SEC to enable firms to explore innovation and stimulate the development of a vibrant and inclusive digital economy in the Philippines.

    Regulatory Sandbox (sandbox) is a regulatory tool that will enable a sandbox participant to test its innovative product or service or a new business model in a live and controlled environment, within a defined period.

    An entity that intends to be a sandbox participant must show, with the necessary supporting information, the following before it can be enrolled in the sandbox:

    1. The proposed financial product or service includes new or emerging technology or uses existing technology in a novel way, addresses a problem, or brings benefits to consumers or the overall financial markets, or any other description of innovation;

    2. The applicant must clearly identify that the financial product or service is not prohibited by law in the Philippines, and why the enrollment to a regulatory sandbox is appropriate and necessary;

    3. The entity has the intention and ability to deploy the proposed financial product or service in the Philippines on a broader scale after successfully exiting the sandbox, if business objectives have been met and if approved by the management of the Sandbox Participant;

    4. The entity has the capacity and is ready to test the financial product and service with actual consumers in a controlled environment;

    5. Description of the source of funds;

    6. A testing plan with test scenarios and expected outcomes of the sandbox experimentation should be clearly defined;

    7. The entity must provide Key Performance Indicators (KPIs) or other metrics in monitoring the progress of the sandbox implementation;

    8. Appropriate limitations and conditions are clearly defined, for the sandbox to be effectively executed while sufficiently protecting the interest of consumers and maintaining the safety and soundness of the industry, including, but not limited to:

      1. Profile of target customers for the sandbox and the requirement to assess their suitability prior to availing of the financial product or service; and

      2. Any limitations in individual and total investment amounts that may be accepted.

    9. Significant risks arising from the proposed financial product or service are assessed and mitigated, as well as the entity’s safeguards to assess and mitigate these risks; and

    10. An acceptable exit and transition strategy should be clearly defined in the event that the proposed financial product or service has to be discontinued or can proceed to be deployed on a broader scale after exiting the sandbox.

    The SEC may periodically post and maintain on its website sandbox activity guidelines, which will include eligible activities and innovations that may be allowed to enter and operate within the regulatory sandbox.

    Participation in the sandbox does not automatically exempt participants from existing laws and the applicable rules and regulations, but the Securities and Exchange Commission may grant waivers or modifications, in its capacity as provided by law, to the sandbox participant depending on the level of risk of their activity, the security measures in place, the support it may provide to SEC’s mandate and projects, and the benefits it may provide to the public and the nation as a whole.

  9. Subject: Anti-Money Laundering Council (AMLC) Regulatory Issuance No. 01, Series of 2024 – Guidelines on Compliance Optimization and Registration System
    SEC Notice
    Date Issued: 3 May 2024
    Link: https://www.sec.gov.ph/notices/anti-money-laundering-council-amlc-regulatory-issuance-no-01-series-of-2024-guidelines-on-compliance-optimization-and-registration-system/#gsc.tab=0

    The AMLC issued the AMLC Regulatory Issuance (ARI) No. 1, Series of 2024, adopting the new Guidelines on Compliance Optimization and Registration System (“CORS Guidelines” or “CORS”).

    The CORS Guidelines shall assist the covered persons in complying with the required AMLC Registration through streamlined procedure and reduced requirements.

    All covered persons are required to register with the AMLC and shall access the online registration system at https://portal.amlc.gov.ph.

PSE UPDATES

  1. Subject: Effectivity of the Amendments to Article III, Part F, Section 13 And Article V, Part F of the Consolidated Listing and Disclosure Rules
    CN No. 2024-0024
    Date Issued: 16 April 2024  
    Link: https://documents.pse.com.ph/CircularOPSPDF/CN-2024-0024.pdf

    The Securities and Exchange Commission has approved the amendments to Article III, Part F, Section 13 and Article V, Part F of the Consolidated Listing and Disclosure Rules. The amendments pertain to:

    1. Making allocation of offer shares to Local Small Investors mandatory instead of discretionary in follow-on offerings (“FOOs”) (Section 3);

    2. Prohibition against the offering during FOOs of secondary shares subscribed, acquired, or availed of at a discount 180 days before the FOO (Section 5);

      This prohibition shall apply to all follow-on offerings, including public offerings undertaken by companies listed by way of introduction or through backdoor listing. The prohibition shall not apply to shares subscribed, acquired or availed of through stock dividend distribution or stock option plan. The Exchange may also rule, on a case-to-case basis, that the prohibition does not apply to shares subscribed, acquired or availed of through any other transaction provide it can be shown that the offering will not give undue advantage to the subscriber.

    3. Inclusion of express reference in the Rule on Follow-On Offerings to certain provisions of the Small, Medium and Emerging (“SME”) Board Initial Listing Rules which are also applicable to FOOs undertaken by SME companies; and

    4. Updating of certain provisions to correct outdated references.

    The details of the amendments to Article III, Part F, Section 13 and Article V, Part F of the PSE Consolidated Listing and Disclosure Rules are provided in the Annex 1 of the Memorandum Circular.
 
 
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