Written by Adrian V. Bancoro, 4 October 2007
Several weeks back, the Securities and Exchange Commission (the "Commission") issued SEC Memorandum Circular No. 3, Series of 2007 following its August 31, 2007 resolution, amending certain rules on the reportorial requirements of its various departments, i.e., Market Regulation Department (MRD), Corporation Finance Department (CFD), Non-Traditional Securities and Instruments Department (NTD) and Company Registration and Monitoring Department (CRMD).
Salient features
For the guidance of our readers, we provide below the salient features of the Memo Circular:
The following reports shall no longer be filed separately with the department involved, but shall be filed only with the CRMD within the prescribed periods:
a. General Information Sheet (GIS) of broker dealers, transfer agents, investment houses/underwriters, investment company advisers, government securities eligible dealers (GSED), financing companies and pre-need companies
b. Notice of change of address of transfer agents
c. Annual financial statements of investment houses/underwriters, investment company advisers and GSED
The following reports filed with the respective departments shall be discontinued:
a. MRD
(i) Self-regulatory organisations’ semiannual report on the number of investors’ complaints/other allied cases and quarterly updates on price alerts (ii) Monthly summary of Philippine Depository and Trust Corporation participants with tax certification requirement (iii) Quarterly report of Securities Clearing Corporation of the Philippines on mark-to-market collateral deposit fund
b. CFD
(i) Self-rating form of listed issuers (now replaced by the Corporate Governance Scorecard pursuant to SEC Memo Circular No. 2, Series of 2007) (ii) Issuer of registered/exempt commercial papers’ monthly report (M-101-40) and list of issuances, outstanding balances and maturing obligations that form part of Form 17-Q (iii) Quarterly report and monthly report of issuers of exempt commercial papers (iv) Financing company’s report on the change in directors/officers with NBI clearance, police clearance, certificate of good moral character, band credit information and proof of financial incapacity
c. NTD
(i) Pre-need company’s report on lapsed, cancelled and surrendered plans and the list of salesmen on apprenticeship
d. CRMD
(i) Notice of postponement of annual meeting (ii) Affidavit of non-holding of annual meeting
Certain reports of transfer agents are to be discontinued. The collection of data subject of said reports shall be made by the Philippine Stock Exchange and which reports shall, upon request of MRD, be submitted to the latter by e-mail.
The format, content and frequency of submission of certain reports from broker dealers, self-regulatory organizations and investment houses/underwriters are modified in accordance with Section 3 of the Circular.
In lieu of the quarterly financial statements, financing companies shall submit within 15 calendar days from the end of the semester the interim financial statements which shall cover the head office and its branches.
The preliminary information statement (Form 20-IS) shall, upon payment of the processing fee, be filed directly with CPD. The Definitive Information Statement shall, however, be filed with the general receiving section of the Commission.
The filing periods of certain reports of pre-need companies and those engaged in Alternative Trading Systems are accordingly modified pursuant to Sections 9 and 10 of the Circular.
The Commission also noted that the 30-day period deadline for the submission of the GIS shall be counted from the date the annual stockholders’ meeting was actually held. However, if the corporation is unable to hold the meeting for the calendar year, the GIS shall be filed not later than January 30 of the following year.
Moreover, submission of a separate report on the election, death, resignation or cessation of office of directors, trustees and officers is no longer required. Instead, corporations are required to submit an amended GIS containing such information with the Commission within 30 calendar days from the date of occurrence of the specific circumstance.
Other reports which have not been discontinued or modified in the Memo Circular shall continue to be submitted in the form and periods prescribed by applicable SEC rules and regulations.
Effectivity date
SEC Memo Circular No. 3-2007, which was published in two newspapers of general circulation last month, is set to take effect on January 1, 2008. Effective this date, the provisions of the 2005 Consolidated Scale of Fines shall be deemed repealed/amended on account of the changes introduced by the Memo Circular.
Presently, compliance with the Commission’s reportorial requirements are not taken seriously by certain companies because of the notion that noncompliance will only subject them to fines and penalties not to mention that the Commission is not also very strict in its monitoring functions. It should be noted though, that under the Corporation Code of the Philippines, noncompliance with the Commission’s reportorial requirements is also a ground for revocation or suspension of the registration/license of corporations. In fact, there have been several instances that the Commission had revoked the registration/license of companies found to have violated its reportorial requirements.
For this reason, we urge our readers to be mindful of the new requirements of the Commission in the filing of reports that apply to their respective organisations.
