PUBLIC and registered COMPANIES issuers will soon be required to submit annual corporate governance reports to the Securities and Exchange Commission (SEC).
“The SEC will soon require public companies and registered issuers to submit an Annual Corporate Governance Report (ACGR), as part of efforts to develop a strong corporate governance culture in the country,” the commission said in a statement.
Public companies are those that have at least 50 million pesos in assets and have 200 or more shareholders owning at least 100 shares each of equity securities.
During this time, registered issuers are those who issue shares or exclusive and / or non-exclusive certificates, equity securities not listed but offered to the public and registered debt securities offpublic, whether or not they are listed on the stock exchange.
The business regulator has drafted an SEC form for ACGR for public enterprises and registered users. Reporting will be done on a “comply or explain” approach in accordance with SEC Memorandum Circular (TM) No 24, 2019 series or the Corporate Governance Code and SEC MC No 19, 2020 series.
The Corporate Governance Code highlights the responsibilities of governance, disclosure and transparency, Corporate Go control and risk management frameworks, cultivating a synergistic relationship with shareholders / members, and duties towards the parties stakeholders.
Companies are not required to adopt these principles, but they have the “flexibility” to create corporate governance practices. However, they should indicate in their reports whether they comply with the provisions of the Code and identify areas where they do not comply and explain why.
Under the draft rules, ACGRs will cover information from January to December of a given year, regardless of the date of registration.
The submission of an ACGR will be required no later than May 30 as long as these companies are considered public companies or registered users. Newly registered companies must also submit their corporate governance manual to the commission.
Three copies must be submitted to the SEC o principalffithis or the nearest extension office, one of which must be notarized and include the original and manual signatures of the company officer. The companies will be Fi5,000 P and a monthly penalty of 500 P for incomplete or incorrect signatories.
Once the draft circular is approved, these companies can submit their reports covering the period January to December 2021 no later than May 30, 2022. Late submissions and non-compliance may result in a penalty of P 20,000 and monthly fees. with a value of P2. , 000.
Listed companies and registered issuers that are already listed on the Philippine Stock Exchange are exempt from the new guidelines because they were already required to submit their CAGRs under a previous circular.
Once the new rules come into effect, public companies and registered users will no longer need to present a certificate of compliance with the Corporate Governance Manual, as well as a certificate.Fiattendance rate of directors at board meetings. – KCGValmonte