By James A. Loyola
The Securities and Exchange Commission (SEC) is requiring publicly listed companies to apprise the investing public of the impact of the COVID-19 outbreak on their business operations and the risk mitigation actions they have taken.
In a notice issued on March 12, the SEC mandated all publicly listed companies to file current reports (SEC Form 17-C) to disclose the risks and impact of the COVID-19 outbreak.
The disclosure must be made to the Philippine Stock Exchange through the PSE Electronic Disclosure Generation Technology (EDGE) not later than noon of March 16, 2020.
Publicly listed companies must include in their reports all measures they will undertake or have undertaken to mitigate the risks and impact of the COVID-19 outbreak.
The requirement is pursuant to the state policy to ensure full and fair disclosure about securities and the duty of issuers to report every fact that would reasonably be expected to materially affect the decision of investors to buy, sell or hold securities.
The SEC is also finalizing measures that will allow the use of remote communication in corporation’s regular and special meetings, and extend the filing period for annual reports for affected corporations.
In a statement, the SEC said it will issue a memorandum circular to provide guidelines on the attendance and participation of directors, trustees, stockholders, members and other officers of corporations in regular and special meetings through remote communication.
Upon approval of the guidelines, the SEC will immediately allow corporations to conduct meetings through remote communication or other alternative modes in order to consider and approve the necessary provisions in their bylaws or internal procedures in time for their forthcoming annual stockholders’ or members’ meetings.
“The Commission itself has been holding meetings through remote communication, allowing for the participation of the directors of its extension offices in Baguio, Tarlac, Legazpi, Cebu, Bacolod, Iloilo, Davao, Cagayan de Oro and Zamboanga,” the SEC noted.
The SEC is likewise set to issue a memorandum circular giving all affected companies more time to submit their annual reports (SEC Form 17-A), including annual financial statements, for the period ended December 31, 2019, as well as quarterly reports (SE Form 17-Q) for the first three months of 2020 for publicly listed companies.
“The extension will allow companies affected by travel restrictions, suspension of business operations and other measures implemented to contain the COVID-19 outbreak to gather all information or documents necessary in the preparation and the subsequent audit of their reports,” said the SEC.
The SEC encourages corporations to use the SEC Express Nationwide Submission (www.secexpress.ph/sens) to submit their annual reports through courier.
“The disruption, risks and effects of the outbreak of the new coronavirus disease, COVID-19, transcend sectors,” SEC Chairperson Emilio B. Aquino said.