SEC simplifies process for early stockholders meetings

MANILA, Philippines — The Securities and Exchange Commission (SEC) has relaxed the requirements for publicly-listed companies and other issuers of registered securities seeking to hold their annual stockholders’ meetings earlier than the date specified in their bylaws.

In a notice dated March 9, the SEC’s Markets and Securities Regulation Department (MSRD) said companies covered by its supervision would no longer need to secure prior approval from the SEC if they intend to conduct their annual stockholders’ meetings (ASM) ahead of schedule.

Instead, the SEC now requires submission of a written notice at least 32 business days before the scheduled meeting for companies that plan to hold their ASM earlier than the date indicated in their bylaws.

The notice must explain the justifiable reason for the early conduct of the ASM and should be approved by the company’s board of directors, accompanied by a secretary’s certificate confirming the approval.

According to the SEC, the written notice should be submitted to the MSRD through the agency’s designated email channel.

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Rationale

The regulator said the new procedure would help ensure that companies continue to comply with the required timelines for the filing and distribution of information statements to shareholders.

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These include the preliminary information statement (PIS) and the definitive information statement (DIS), which must be filed and circulated within the periods prescribed under Republic Act No. 8799, or the Securities Regulation Code, and its implementing rules and regulations.

The SEC also stressed that the early conduct of an annual stockholders’ meeting must still be disclosed through the filing of SEC Form 17-C, which should be made publicly available on the company’s website.

For publicly listed firms, the disclosure must likewise be posted on the Philippine Stock Exchange Edge website, allowing investors and the public to access the information.

Conditions

In addition, the SEC said companies must ensure that the rights of stockholders are not impaired by the earlier meeting schedule. Firms are also encouraged to facilitate the participation of minority shareholders in the annual meeting.

The SEC emphasized that companies must still comply with the deadlines for the filing of the PIS, DIS, and the distribution of information statements, even if they opt to hold their stockholders’ meetings earlier than scheduled.

The move is expected to streamline the process for companies while maintaining transparency and investor protection in the conduct of stockholders’ meetings. /dda