SEC to issue new sked of fines for erring firms

The Securities and Exchange Commission (SEC) has come up with a consolidated scale of fines to rationalize the amount of penalties imposed on erring corporations and to ensure strict compliance with the Securities Regulation Code.

Under the proposal, a mere reprimand or warning shall be issued for first violation of rules.

For failure to comply with reporting obligations, a basic amount of penalty plus daily fine for every day of delay or continuing violation. While the basic penalty is reduced, a daily fine is imposed for every day of delay, the SEC said.

For issuance of securities without prior registration, a percentage of the amount of each transaction or P10,000 per transaction, whichever is higher.

For failure to timely file beneficial ownership reports, the SEC will impose a penalty based on the percentage of the amount of each purchase or P10,000 per transaction whichever is higher plus P100 per day of delay.

Penalties shall also be imposed for late or incomplete filing of information statements, monthly and quarterly reports on commercial papers, for failure to comply with the requirements of the tender offer rule and the rule on stockholders’ meetings.

The SEC said a person assessed with a fine may be exempted from the payment if the cause of the violation is the occurrence on the due date of filing of the report, of a fortuitous event or such other similar circumstances as the commission en banc may approve.

A person assessed with a fine may be allowed a reduction of 30 percent if all the following are present; the risk of loss as a result of the transaction is not significant; the amount involved in the event of the information not disclosed is insignificant or not more than five percent of the company’s total assets or net income whichever is higher; and the company is not delinquent in complying with its reportorial obligations. It should not be cited for second offense for the same violation.

The SEC, however, is not precluded from considering other circumstances/justification as valid ground for the reduction of the assessed penalty.