SEC to penalize misleading, incomplete company filings

Those “typos” are about to get a lot more expensive.

The Securities and Exchange Commission (SEC) warned corporations their electronic submissions of financial and annual reports would be considered “complete and accurate” and that serious errors would be punished with large fines beginning Nov. 2 this year.

The revised Corporation Code of the Philippines noted that deficient or even misleading information would result in penalties amounting to P20,000 to P200,000.

When these errors are “injurious or detrimental to the public,” the person or auditor may be punished with fines ranging from P40,000 to P400,000.

The SEC allows the online submission of reportorial requirements though its e-FAST platform, which was previously known as the Online Submission Tool.

It was launched in March 2021 in the midst of the pandemic lockdowns.

The SEC’s notice indicated that error-filled submissions had plagued the system.

“Any inaccuracy, incompleteness, false or misleading information in the submitted reports shall be penalized accordingly,” the notice showed.

“No report shall be returned to the filers for correction. Amendments shall no longer be allowed unless directed by the Commission,” it added.

It said the electronic records management division would accept all reports filed in the e-FAST platform regardless of the accuracy of its content.

Liable representatives

Meanwhile, the regulator’s compliance monitoring division, or CMD, “shall conduct the necessary diligence to ensure that the authorized representatives of the companies who submitted the inaccurate reports shall be held liable for the corresponding penalty imposed.”

“Effective November 2, 2022, all inaccurate, incomplete, false or any misleading information, which can be found in the submitted reports, shall be penalized accordingly by the CMD or other operating departments monitoring the reports,” the notice showed.

The e-FAST system has accepted nearly 440,000 submission as of Sept. 16 this year, according to the SEC.

This was rolled out alongside an online payments system and the Electronic Simplified Processing of Application for Registration of Companies.

The platforms helped new corporation registrations surge over 50 percent to 37,379 in 2021 alone. New registrations as of September this year reached almost 57,800, the SEC said. INQ