The SECURITIES and Exchange Commission (SEC) has suspended monthly fines for late filing until the end of the year as part of efforts to reduce compliance costs and improve the ease of doing business.
The corporate regulator in a memorandum circular deferred the penalty for “one month of delay” in the submission of annual financial statements and general information sheets.
The previous system imposed escalating charges based on the length of the delay, with each half of the month considered a full month and penalties capped at 12 months of non-payment.
“The suspension of the expected monthly penalty is a practical and reasonable way to change the rules that directly reduces the burden of compliance costs for all registered entities, including micro, small and medium enterprises (MSME), and demonstrates the commission’s commitment to a business-friendly regulatory environment,” the circular said.
The suspension will remain in effect until Dec. 31 unless the commission is extended or changed.
The order covers all domestic and foreign companies under the SEC’s jurisdiction, including stock and non-stock companies and sole proprietorships.
The SEC said companies must still file annual financial statements and general information documents within the deadlines set under the Revised Corporations Code and existing laws, while the basic penalties for lateness or non-transparency continue to apply.
In pending monitoring cases, the SEC said monthly fines will no longer be included in the assessment, while companies that have already received a final assessment but have not yet paid will be issued revised payment statements without a monthly fee.
However, fines that were paid in full before the order came into force will no longer be refunded or credited.
“As we celebrate the Ease of Doing Business during the month of May, the SEC reaffirms its commitment to promoting a strong and responsive business environment,” SEC Chairman Francisco Ed. Lim said in a statement.
“By setting monthly aggregate fines, we are giving companies the opportunity to restore their good standing without the burden of rising transaction costs, as part of our aim to force companies to fully adapt to continued growth,” he added.
In a separate circular, the SEC also revised the rules defining “qualified brokers” under the Securities Regulatory Code by expanding the types of securities included in the required investment portfolios.
Under the revised rules, individual investors must have at least P10 million in gross annual income for two straight years or a total portfolio investment of at least P10 million, including registered and free securities, and relevant investment experience requirements.
For legal entities, the limit remains at P100 million in net assets or P60 million in portfolio investment. – Alexandria Grace C. Magno
