THE Securities and Exchange Commission (SEC) drafted an amendment to the 2019 Revision of General Information Sheet (GIS) which will increase and add non-financial penalties for late disclosures.
In a notice posted last week, the SEC introduced an amendment to Section 11 of the SEC MC No. 15, series of 2019 (also known as the 2019 Revision of GIS) in which it increased the penalties for late disclosures by five times.
The regulator plans to increase the penalty on stock corporations for late disclosure to P50,000 for the first violation, from P10,000; P100,000 for the second violation, from P20,000; P250,000 for the third violation, from P50,000; and P500,000 for the fourth and subsequent violations, from P100,000.
Meanwhile, for non-stock corporations, the first violation penalty will be P25,000 from P5,000; P50,000 for the second violation, from P10,000; P100,000 for the third violation, from P20,000; and P250,000 for the fourth and subsequent violations, from P50,000.
Stock or non-stock corporations with total assets of P500,000 to P5 million will have twice the amount of penalty imposed on those with less than P500,000 assets.
For firms with total assets of P5 million to P10 million, the penalty will be thrice the amount imposed on those with less than P500,000 assets.
Meanwhile, those with more than P10 million in assets will have four times the penalties imposed on those with less than P500,000 in assets.
The SEC also added that if a corporation fails to submit the updated GIS in a timely manner at least three times consecutively or intermittently within a period of five years, the commission after due notice and hearing will declare the firm suspended.
Additionally, the SEC said that if corporations that received notice of incomplete disclosure fail to submit complete beneficial ownership information within 15 calendar days, they will be penalized.
For stock or non-stock corporations with total assets of less than P500,000, a penalty of P250,000 will be imposed, while for those with P500,000 to less than P5 million in assets, the penalty will be P500,000.
Meanwhile, corporations with P5 million to P10 million will have a P1 million penalty, while those with more than P10 million in assets will have a P2 million penalty.
After due notice and hearing, a company’s second violation will result in suspension and the third violation will result in the revocation of its certificate of incorporation
The liability of directors, trustees, and officers will also be amended to a penalty increase of 100% or two times of what was stated in the 2019 revision.
The SEC also added an amendment to Section 3 of the memorandum wherein it stated that it will no longer accept the submission of any GIS without the declaration of beneficial ownership information. — Justine Irish D. Tabile