SEC easing rules on capital raising  

MANILA, Philippines —  The Securities and Exchange Commission (SEC) is moving to ease the capital-raising requirements for companies.

The move is meant to encourage Philippine companies to raise funds for their growth and expansion primarily through the capital markets.

The SEC has issued guidelines streamlining the requirements for companies seeking to do fund-raising activities.

SEC chairperson Emilio Aquino said the streamlined procedures are part of the regulator’s efforts to encourage more companies to tap the capital markets for their business expansion needs.

“The SEC will continue to find more ways to make the registration of securities and securing a license to sell such securities easier, which will also translate to more investment opportunities for the public,” Aquino said.

The new guidelines effectively lessen the requirements for companies.

Annex C of SRC Rule 12 details the non-financial information that must be disclosed in the registration statements filed with the SEC by corporations issuing securities such as shares of stock, corporate bonds and commercial papers in order to raise capital.

The guidelines also require a registrant to discuss its “financial condition, changes in financial condition, and results of operation for each of the last three fiscal years” under the management’s discussion and analysis section of its prospectus.

The SEC clarified that registrants are required to disclose financial information for only two comparative periods for the last three fiscal years.

For instance, financial statements for the year that ended Dec. 31, 2022 must contain line items showing comparative balances only for Dec. 31, 2022 and Dec. 31, 2021.

“In addition, the financial statements must contain line items for the comparative balances only for the fiscal years ended Dec. 31, 2021 and Dec. 31, 2020,” the SEC said.

The SEC also relaxes the requirement for a registrant to provide mitigating factors in the risk factors section of its prospectus, making the disclosure optional.