Trade groups seek repeal of SEC rulings
Local business groups have urged the suspension or repeal of four regulatory issuances made by the Securities and Exchange Commission (SEC) as these were seen derailing the competitiveness of Philippine industries and companies, particularly the micro, small and medium sized enterprises (MSMEs).
In a joint letter sent to the Department of Trade and Industry and the National Competitiveness Council, the three business groups—the Philippine Chamber of Commerce and Industry (PCCI), the Philippine Exporters Confederation Inc. (Philexport) and the Employers Confederation of the Philippines (Ecop), noted that the four issuances were either “costly, redundant or useless.”
One of the issuances being contested by the business groups was memorandum circular 10-2014, which requires the submission of the alphalist disclosing specific income and taxes paid.
“We propose that the policy be suspended as it poses a grave threat to our ability to attract local and foreign investments. This is another grave abuse of discretion in issuing regulations without regard to the right to privacy,” the business groups stressed in their letter dated Feb. 11.
“This disclosure may compromise the safety of people and companies if they are identified by unauthorized third parties. Further, the integrity of a particular market of the taxpayer could be affected by the release of such information; and the requirement for such disclosure may entail that companies violate the bank secrecy laws,” the letter added.
Local businessmen called the attention of the DTI and the NCC to a new policy of the Board of Accountancy (BOA) requiring companies with revenues exceeding P10 million a year to engage certified public accountants (CPAs) to prepare financial statements and to sign a certificate of preparation and disclosure notes to be attached to annual financial statements.
According the groups, this requirement was a clear case of vested interests compromising the competitiveness of corporations, especially SMEs that will be prejudiced by this imposition.
They pointed out that the BOA rule was “unnecessary and redundant” since all financial statements submitted to the SEC and the Bureau of Internal Revenue (BIR) were already required to submit a duly signed Statement of Management’s Responsibility.
MSMEs, they noted, might not have CPAs as chief accountants or finance managers as there were cases when such roles were taken up by the owner himself who may not be a CPA. Hiring a CPA will clearly be another unnecessary cost.
“We bring up this concern with the SEC, noting that the BOA requested the SEC to assist in monitoring the compliance of those submitting the annual statutory financial statement. Because of the challenges that this will pose, may we strongly urge the SEC to recommend to BOA a suspension of this policy,” the groups said.
Another issuance is MC 6-2014, which requires the complete address of corporations and partnerships in their Amended Articles of Incorporation/Partnership and the retroactive implementation of the MC.
The groups said this “policy will neither be useful in tracking delinquent companies as this may only affect those that are already compliant.”
The business groups also scored the implementation of MC 20-2013, which directs all board directors and key officers of publicly listed firms to attend at least once a year training on corporate governance conducted by SEC-accredited training providers. This proposal, they stressed, would only benefit the service providers at the expense of publicly listed firms.