Don’t delay — avail of the SEC amnesty today
Many of us are always on the lookout for bargains, whether these be the monthly sales offered in online shopping sites or seat sales for air travel. Bargains are opportunities for most people to get more value for money. For corporations, the recent amnesty offered by the Securities and Exchange Commission (SEC) appears to be one of the best bargains in years. This time, the amnesty is available to certain corporations until the end of April.
As part of the SEC’s continuing efforts to encourage regulatory compliance, on March 16, it issued Memorandum Circular (MC) No. 2, series of 2023 (MC 2-2023) granting domestic and foreign corporations and other regulated entities amnesty for non-compliance with its documentary and reporting requirements and with MC No. 28, series of 2020 (MC 28-2020) or the submission of the e-mail addresses and mobile numbers.
The amnesty does not apply to public and publicly listed corporations, corporations with intra-corporate dispute or with disputed General Information Sheets (GIS), and other corporations covered under Sec. 17.2 of RA No. 8799 or the Securities Regulation Code.
As a rule, non-compliance with the SEC’s reporting requirements results in administrative penalties, monetary penalties, and in the worst case, revocation of a company’s registration. More often than not, the SEC discovers the non-compliance whenever companies go through the monitoring process, which is an indispensable requirement in some applications filed with the SEC (e.g., increase in authorized capital stock, mergers).
With the amnesty granted on the unassessed and/or uncollected fines and penalties for the non-filing or late filing of the GIS, Financial Statements (FS), and its attachments, for the latest and prior years, SEC-regulated entities are provided ample and cost-effective opportunities to return to compliance with the SEC.
The fixed amnesty amount of P5,000 for non-compliant corporations and prescribed amnesty rate of 50% of the assessed fines for suspended and revoked corporations (including those which have filed for the lifting of suspension/revocation), encompasses all violations for non-filing and late filing of the GIS, and AFS and its attachments. Additionally, the penalty for failure to submit the e-mail addresses and mobile numbers as required under MC 28-2020 in the amount of P10,000, will be waived.
To avail of the amnesty, corporations should file an Online Expression of Interest Form (EoI) via eFAST. In addition, revoked and suspended corporations also need to file a Petition to Lift Order of Suspension/Revocation in addition to the EoI. The eFAST will automatically generate a Payment Assessment Form (PAF) reflecting the fixed amnesty amount or the petition fees, as the case may be. Once the payment is settled, the applicant must then upload via eFAST the Notarized Application for Amnesty Form together with the required documents such as latest due FS, GIS and proof of compliance with MC No. 28-2020.
While the application process is fairly straightforward for non-compliant corporations, revoked and suspended corporations will have to wait for verification of their corporate status. Once the assessment and monitoring process is completed by the SEC, revoked and suspended corporations will receive an e-mail notification with the PAF reflecting 50% of the total assessed fines which may be settled through eSPAYSEC or the Land Bank of the Philippines (LANDBANK) On-Coll Facility.
When all the conditions set forth in MC 2-2023 have been fully complied with, a Confirmation of Payment for Amnesty on Fines and Penalties (Confirmation) will be issued to the company’s registered e-mail address.
The amnesty granted is final and irrevocable, covering the period/s indicated in the Confirmation. This, however, does not exempt corporations from filing their subsequent mandatory reporting requirements in a timely manner. And in the case of revoked or suspended corporations, the amnesty does not automatically lift their suspended or revoked status, which will be a separate proceeding with the Company Registration and Monitoring Department of the SEC.
Note that only those which have filed an amnesty application, secured a PAF through the eFAST, and paid through the eSPAYSEC or LANDBANK On-Coll Facility on or before April 30 are eligible for amnesty. Thereafter, the existing SEC scale of fines and penalties will apply.
In a notice issued by the SEC on March 23, effective April 1, the accounts of all corporations enrolled in the eFAST with revoked, suspended and non-compliant registration status are to be put on “on-hold” as a window in availing of this amnesty. Should such companies fail to avail of the amnesty this month, they will have to undergo the standard process of requesting for monitoring, and of filing the necessary petition for the lifting of their suspension or revocation should they wish to revive their registration. They must likewise settle the assessed fines and penalties in full to reactivate their accounts in eFAST.
The recent Easter holidays has provided time to pause and reflect on our mistakes and shortcomings. For some, it has also provided the chance to seek forgiveness and renew commitment to the faith. Perhaps it is an opportune time as well to renew our corporations’ conformity with SEC’s documentary and reporting requirements for a bargain price before the month ends.
The views or opinions expressed in this article are solely those of the author and do not necessarily represent those of Isla Lipana & Co. The content is for general information purposes only, and should not be used as a substitute for specific advice.
Anika Mae Fierro is a senior associate at the Tax Services department of Isla Lipana & Co., the Philippine member firm of the PwC network.
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