SEC waives fine on RBs for reportorial deficiencies

The Securities and Exchange Commission (SEC) has waived the fines imposed on rural banks that failed to comply with the agency’s reportorial requirements.

SEC chairman Lilia R. Bautista said the Commission decided to forego the fines imposed on rural banks due to numerous requests received from these banks.

In their appeal, the rural banks claimed that while they have failed to submit financial reports and information sheets to the SEC, they have religiously filed the same with the Bangko Sentral ng Pilipinas.

Bautista, however, said the amnesty is limited only to acts committed last year. This means that rural banks will have to comply with the reportorial requirements beginning this year or be slapped with the appropriate fines.

She said the Commission also resolved to reduce the fines meted against non-stock corporations (such as religious organizations and foundations) by 75 percent. On the other hand, a 50 percent discount will be given to stock corporations which are not regulated by the SEC.

The SEC earlier directed corporations that failed to file reportorial requirements for the past six consecutive years to settle their deficiencies by end-September this year or their registration licenses would be revoked. Covered by this directive are corporations registered from 1936 to 1995.

Under the Corporation Code, all corporations are required to submit annual reports such as the general information sheet and financial statements.

According to the SEC, most of these delinquent corporations are schools and universities.

Last year alone, the SEC revoked the registration of 27,982 delinquent and inactive corporations.

The SEC has come up with a new scale of fines to compel corporations to submit periodic reports on time, disclose accurate information, and file the necessary registration statement before any sale of securities is made to the public.

Based on the revised scale of penalties, corporations which file late or incomplete annual financial reports and information statements will be charged a P100,000 fine or one-tenth of one percent of the consolidated net income/revenue, whichever is higher.

For second, third and fourth offense, the penalty increases to P200,000; P600,000; and P1.2 million, respectively.

A P75,000 fine is levied on firms that fail to submit quarterly reports on time while a P50,000 penalty is imposed on entities that neglect the SEC’s requirement on disclosure of current reports which include statements of beneficial ownership.

Under the previous set-up, the SEC charged a basic fine of P100,000 for SEC-registered corporations that fail to submit annual reports, tender offer reports, proxy statement, and information sheets on time.

This year, the SEC will implement its compliance monitoring and evaluation system (CMES) which will provide an automated facility to monitor the compliance of registered entities with government laws and regulations.

The CMES will enable on-line analytical processing of the financial performance of registered entities as well as provide a mechanism to monitor enforcement of actions against non-complying companies. The first two phases of this project called SEC-I-Report, will allow decentralized access to the SEC corporate files.