The Securities and Exchange Commission (SEC) has rolled out an incentive program to encourage delinquent corporations to restore their good standing by giving them discounts on penalties if they submit their delayed annual reports.
Following the success of the amnesty program it implemented last year, the Commission issued SEC Memorandum Circular (MC) No. 13, Series of 2024, last August 30, providing for the Enhanced Compliance Incentive Plan (ECIP).
“As a regulator, the SEC is committed to ensuring that entities under its supervision are compliant with all the laws, rules, and regulations applicable to them,” SEC Chairperson Emilio B. Aquino said.
He noted that “After the SEC Amnesty Program, the Commission has strictly imposed higher revised fines and penalties to encourage strict and habitual compliance with reportorial obligations and good corporate housekeeping.
“With the launch of ECIP, we are affording corporations under our supervision another opportunity to remedy their violations, at lower fees, and restore their good standing.”
Under ECIP, non-compliant corporations, including those placed under “delinquent” status, may settle their unassessed or unpaid fines and penalties for P20,000 only.
Meanwhile, suspended and revoked corporations, including those with pending petitions for the lifting of the suspension or revocation order issued against them, may settle only 50 percent of their assessed fines and pay the petition fee of P3,060.
The significantly lower rates apply to fines and penalties imposed on corporations for the late or non-filing of General Information Sheet (GIS) and Financial Statements (AFS) for the latest and prior years.
The ECIP also covers violations under SEC Memorandum Circular No. 28, Series of 2020, which requires all entities registered with the Commission to designate and submit their official and alternative email addresses and mobile phone numbers.
Applications of non-compliant, suspended and revoked corporations for ECIP may be submitted starting September 2, 2024 and until November 30, 2024.
Stock and nonstock corporations, including branch offices, representative offices, regional headquarters, and regional operating headquarters of foreign companies, may avail of the ECIP.
Firms who cannot avail of the ECIP are listed or registered on the Philippine Stock Exchange (PSE), other public companies, firms with intra-corporate dispute, disputed GIS, expired corporate term, and those covered under Section 17.2 of Republic Act No. 8799, or the Securities Regulation Code.
Non-compliant corporations include those that have not submitted their GIS and AFS intermittently or consecutively in previous years, or have not complied with MC 28.
Delinquent corporations, meanwhile, are those that have failed to file their AFS or GIS for three times, consecutively or intermittently, within a period of five years, as provided under SEC Memorandum Circular No. 19, Series of 2023.
However, payment of the ECIP fee, in itself, does not automatically confer “compliant” status to availing corporations or lift the suspension and revocation of their certificates of incorporation. Applicants are required to submit the corresponding supporting documents.