This reaction came in the midst of a proposal by the PSE’s Listing Committee, chaired by former banker Peter Favila, to implement penalties in non-monetary form in lieu of the P50,000 fine for violations such as late or non-disclosure of vital corporate information.
Favila, one of the PSE board’s non-broker directors, said the non-monetary penalties could be in the form of stiff reprimand, newspaper notices or community service, hence freeing the offending company from the monetary penalty.
But Coyiuto, an active oppositor in the present PSE board led by chairperson Vivian Yuchengco and president Ernest Leung, said the move would not only be counter-productive in the Exchange’s efforts to toughen up on the listed companies but would also sizably cut down on their already tight revenue stream.
"They just want to be popular, in fact we are proposing higher penalties so that people will take us seriously," Coyiuto said. "There are rules to follow and these rules were not done overnight so why change it."
He added that the Exchange itself has been in a tight financial situation at the moment considering that revenues from listing (including initial public offerings) – where about 80 percent of the PSE’s revenues come from – have been on a slump.
The PSE’s plan was likewise in contrast with the move last year of the Securities and Exchange Commission (SEC), to toughen up on companies that have not been meeting the deadlines on the submission of their respective financial reports and other relevant information or corporate development.
The SEC has increased by 100 percent the basic fine of first-time offenders, publicly-listed firms and other registered corporate issuers for failing to submit on time their annual reports, tender offer reports, proxy statement and information statement. From the previous fine of P50,000 this has been doubled to P100,000, including the penalty for every day of delay from the previous P50 to P100.
On their subsequent offenses, an additional penalty of P50,000 will be imposed, which translates to P150,000 on the second offense and P200,000 for the third offense. The SEC can either suspend or revoke the registration of companies that have habitually failed to comply with the rule for up to the fourth time.
Under the Securities Regulation Code, companies are required to file periodic reports that include the balance sheet, profit and loss statement and statement of cash flows, within 135 days after the end of the firm’s fiscal year.
The SEC has also adjusted the scale of fines for quarterly reports and current reports at P50,000 each while statements of beneficial ownership will be liable for penalties of P10,000, P20,000 and P50,000 for nominal, five percent and 10 percent ownership levels, respectively.
The subsequent offenses for failing to submit quarterly and current reports on time will be slapped an additional penalty of P25,000 while those for beneficial ownership will be jacked up by P5,000.– Conrado Diaz Jr.