By means of Revin Mikhael D. Ochave, Reporter
THE SECURITIES and Exchange Commission (SEC) has launched an incentive program that allows non-compliance and delinquencies companies to settle fines and sanctions on “signiFclearly” lower rates.
Applications for the Enhanced Compliance Incentive Plan (ECIP) can be submitted to the regulator until November 30, the SEC said in an emailed statement.
The SEC has issued Memorandum Circular (MC) No. 13 on the ECIP, allowing companies that have not filed their annual reports on time to “restore their good reputation” by settling fines and penalties.
The new plan comes after more than 81,700 companies took advantage of the SEC Amnesty Program and met reporting requirements by 2023.
“Following the SEC amnesty program, the commission imposed more stringent reviews Fmeasures and penalties to encourage strict and customary compliance with reporting requirements and good business conduct,” said SEC Chairman Emilio B. Aquino.
“With the launch of ECIP we are oneFgiving companies under our supervision a new opportunity to remedy their violations, at lower fees, and restore their good reputations,” he added.
The ECIP covers unassessed and uncollected amounts Ffines and sanctions for violations such as late and non-submission of a General Information Sheet (GIS) for the last and previous years, as well as late and non-submission ofFyear Ffinancial statement (AFS).
It also applies to companies that have not succeeded in their offofficial and alternate email addresses and mobile phone numbers as required under MC No. 28.
Under the ECIP, non-compliant and delinquent businesses could settle their unassessed or unpaid fines for P20,000. This rate only applies if the company or entity submits the most recent reporting requirement and complies with MC No. 28.
Non-compliant companies refer to companies that have not submitted their GIS and AFS intermittently or consecutively in recent years.
Companies are considered negligent if they fail to submit their AFS or GIS three times, consecutively or intermittently, within a specified period. Fperiod of five years.
The ECIP also covers suspended and revoked companies, including companies with pending petitions for the lifting of the suspension or revocation order issued against them. They only have to settle 50% of the assessment Fines and pay a petition fee of P3,060.
Entities excluded from the ECIP include companies whose securities are listed on the Philippine Stock Exchange (PSE); whose securities are registered but not quoted on the PSE; considered public enterprises; with disputes within a company; with disputed GIS; with expired operating term; and which are subject to Section 17.2 of Republic Act No. 8799 or the Securities Regulation Code.
However, the SEC cautioned that payment of the ECIP fee does not mean companies are automatically “compliant” as they are still required to submit supporting documents.
Non-compliant and delinquent companies must submit their most recent AFS, as well as their offofficial and alternative email addresses.
For suspended or revoked companies, they must file a petition to lift the order of suspension/revocation of registration certificate, last due AFS and GIS, secretcertificate of no controversy within the company, the latest mayoral or business license, certificate of registration with the Bureau of Internal Revenue, and comply with MC 28.
“If an applicant company fails to submit the full set of requirements within the prescribed period, the ECIP fees, as well as the initial petition fee of P3,060 applicable to suspended and withdrawn companies, will be forfeited,” the SEC said.
Interested companies can apply for the ECIP through the SEC’s Electronic Filing and Submission Tool (eFAST).
“This would be effective if more companies complied. It also helps towards maintaining good standing and improving reputation among the investing public as compliance is a sign of good business practices,” said Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message after being asked for comment.
COL Financial Group, Inc. Chief Equity Strategist April Lynn Lee-Tan said in a Viber message that the ECIP could help drive corporate compliance.
However, Ms Tan said the process would be difficult for small businesses interested in using the ECIP, citing the number of supporting documents required to be submitted.
“One of the potential issues with this is that the companies will still take steps to take advantage of this incentive, and some may face challenges,” she said.
“All companies have requirements for this Ffilings with the SEC. For some companies, especially small ones, it is difficult to obtain this. If I am a small business, I still have to hire a lawyer and an auditor,” she added.