SEC grants amnesty on non-filing, late filing of reports

The Securities and Exchange Commission (SEC) is granting corporations and other regulated entities an amnesty on the late and non-filing of certain reportorial requirements.

The Commission on March 15 issued SEC Memorandum Circular No. 2, Series of 2023, or the Grant of Amnesty for Non-filing and Late Filing of the General Information Sheet (GIS) and Annual Financial Statement (AFS), and Non-Compliance with Memorandum Circular No. 28, Series of 2020 (MC 28).

The amnesty, which will come in the form of a waiver or reduction of fines, is part of the commission’s efforts to encourage its regulated entities to comply with reportorial requirements under Republic Act No. 11232, or the Revised Corporation Code.

The timely submission of reportorial requirements will also allow for the prudent identification of active and inactive corporations, and give the commission the capacity to enhance and organize its database towards nurturing a healthy and vibrant corporate sector.

Amnesty rates

Under the guidelines, the SEC will provide an amnesty on the unassessed and/or already assessed but not yet paid fines and penalties by the commission for the non-filing and late filing of the GIS for the latest and prior years, as well as the non-filing and late filing of AFS, including its attachments such as the certificate of existence of program/activity, non-stock, non-profit organization forms, for the latest and prior years.

An all-encompassing fine of PHP5,000 will be charged for all such violations, in lieu of the usual fines and penalties imposed by the commission.

The rates will apply provided that the corporation or entity will submit the latest reportorial requirement due at the time of the application, and comply with MC 28.

The PHP10,000 penalty for non-compliance with MC 28 will be waived.

Meanwhile, suspended and revoked corporations, including those which have filed for the lifting of suspension or revocation, will be given a 50-percent reduction on their assessed fines, encompassing all violations on the non-filing and late filing of GIS and AFS.

Pursuant to the guidelines on the imposition of fines or penalties for non-compliance with reportorial requirements, stock corporations who fail to submit their GIS or AFS are currently fined within the range of PHP1,000 to PHP10,000 per report yearly, depending on the retained earnings from their latest AFS.

On the other hand, non-stock corporations have corresponding fines of PHP500 to PHP5,000 for non-filing of their GIS and AFS.

Late filing of reportorial requirements for both stock and non-stock corporations will be imposed a fine equivalent to 50 percent of these rates.

Covered entities

The amnesty will be extended to corporations, including branch offices, representative offices, regional headquarters and regional operating headquarters of foreign corporations and foundations.

It shall also cover associations, partnerships, and persons under the jurisdiction and supervision of the commission that failed to comply with MC 28.

The amnesty, however, will not cover corporations whose securities are listed on the Philippine Stock Exchange; those whose securities are registered but not listed on the PSE; those considered as public companies; those with intra-corporate dispute; those with disputed GIS; and other corporations covered under Section 17.2 of Republic Act No. 8799, or the Securities Regulation Code.

Application process

To qualify for the amnesty, the duly authorized representative or resident agent of the corporation shall file an online expression of interest form (EOI) via the Electronic Filing and Submission Tool (eFAST).

Applicants for both domestic and foreign corporations must submit the latest due FS or undertaking to submit the FS within 45 calendar days from the issuance of confirmation of payment; latest due amended FS; latest due GIS and amended GIS, if any; and proof of compliance with MC 28.

Non-compliant corporations shall file their EOI through the eFAST, together with a proof of compliance with MC 28.

Meanwhile, revoked and suspended corporations shall file their online EOI and upload the petition to lift order of suspension/revocation, and proof of MC 28 compliance through eFAST.