The Securities and Exchange Commission (SEC) has suspended until yearend the monthly penalties imposed on corporations that fail to submit reportorial requirements on time.
The regulator said Wednesday the suspension covers the compounding monthly fines imposed on late or non-filing of annual financial statements (AFS) and general information sheets (GIS) under SEC Memorandum Circular No. 6, Series of 2024.
The SEC said its Commission En Banc approved the measure during its 5 May meeting to promote ease of doing business and encourage corporations to settle pending compliance obligations.
Under existing rules, one-person corporations and domestic stock/non-stock corporations with retained earnings/fund balance/equity incur an additional P1,000 for every month of continuing violation for the late or non-filing of their GIS or AFS, on top of the base penalty imposed based on a corporation’s retained earnings/fund balance/equity.
For corporations with negative retained earnings, the additional penalty for every month of delay is P500.
“As we celebrate the Ease of Doing Business month this May, the SEC reaffirms its commitment to foster a robust and responsive business environment,” SEC Chairperson Francis Lim said.x
“By suspending the compounding monthly penalties, we are providing corporations an opportunity to get back their good standing without the burden of mounting transaction costs, as part of our goal of pushing corporations toward full compliance and sustainable growth,” he added.
The SEC clarified that only the monthly penalty component will be suspended, while base fines for late or non-filing of reports will continue to be imposed in accordance with the current schedule.
The suspension will apply to corporations with pending monitoring applications. Corporations that have received final assessments but have not yet settled payment will be issued updated assessments, excluding the monthly delay components.
Meanwhile, penalties already settled before 5 May are not subject to refund or credit.