SEC to require filing of governance reports

The Securities and Exchange Commission (SEC) plans to require public companies and registered issuers to submit an annual corporate governance report (ACGR) in a bid to instill a strong domestic corporate governance culture.

Covered are firms with assets of at least P50 million and with 200 or more shareholders holding at least 100 shares each of equity securities. Registered issuers refer to companies that issue public shares or certificates, equity securities that are not listed on an exchange, or debt securities that are required to be registered with the SEC, whether or not listed on an exchange.

Public companies and registered issuers that are listed on the Philippine Stock Exchange will no longer be covered by the guidelines as they had been required since 2017 to submit ACGR.

Under the proposed guidelines, submission of ACGRs should be made on or before May 30 of every year.

Public companies and registered issuers will be mandated to report their compliance or noncompliance with the Code of Corporate Governance under SEC memorandum circular No. 24, series of 2019.

The code promotes 16 principles across different corporate governance subjects, namely: board’s governance responsibilities, disclosure and transparency, internal control and risk management frameworks, cultivating a synergic relationship with shareholders/members, and duties to stakeholders.

Late or nonsubmission of the ACGR may lead to a basic penalty of P20,000 plus a monthly penalty of P2,000.

Incomplete disclosures may trigger a penalty of P10,000 and a monthly penalty of P1,000.

Those that will commit misrepresentation or provide misinformation in their ACGR will be subject to a penalty of P50,000 and a monthly penalty of P5,000. Those with incomplete or incorrect signatories will be slapped with a fine of P5,000 plus P500 per month of noncompliance. INQ