2.memorandum Circulars

MEMORANDUM
CIRCULARS
1
2
Resolution to further facilitate the registration
and monitoring of corporations (7/15/09)
Application for registration/amendment of articles

of incorporation / partnership may be filed at the
SEC’s main office or any of its extension offices (EO)
regardless of the corporation’s / partnership’s
business address;
A Corporation may, at its option, request that its

submission of the required reports or compliance
with the monitoring req’ts. be made or done at the
Commission’s main office.
3
Amendment on the Guidelines and Procedures
on the Use of Corporate and Partnership Names
A.Investment(s) – By entities organized as investment house or

investment company;
B.Capital – by entities organized as investment house, invenstment
company or holding company;
C.Asset/Investment/Fund/Financial management – organized as
investment company adviser or holders of investment management
activities license from the Bangko Sentral ng Pilipinas
D.National/Bureau/Commission/State – entities that perform
government functions
4
E. Association and Organization – by entities primarily engaged in
non profit activities
F. Stock Exchange / Futures Exchange / Derivatives Exchange ,
Stock broker/ Securities broker, Derivatives Broker – entities
organized as an exchange, broker dealer, commodity futures
broker, clearing agency, or pre-need company under the
Securities Regulation Code.
5
Amendment on the Guidelines and Procedures
the use of Corporate and Partnership Names
A.The corporate name shall contain the word “Corporation” or

“Incorporated,” or the abbreviations “Corp.” or “Inc.” respectively;
B.The partnership name shall bear the word “Company” or “Co.” and if
it is a limited partnership, the word “Limited” or “Ltd” A professional
partnership name may bear the word “”Company,” “Associates,” or
“Partners,” or similar descriptions;
C.The corporate name of a foundation shall use the word
“Foundation”;
6
D. The corporate name of all non-stock, non-profit corporations,
including non-governmental organizations and foundations,
engaging in microfinance activities shall use the word
“Microfinance or “Micro financing”; provided that said corporations
shall state in the purpose clause of their Articles of Incorporation
that they shall conduct microfinance operations pursuant.
7
Guidelines on the Use of Corporate Names of
Corporations with Dissolved and Revoked
Certificates of Registration
The commission in its meeting on June 2, 2015, resolved to amend

the paragraph of SEC Memorandum Circular No. 21, Series of 2013
8
 The following requirements are already
dispensed:
◦ Bank Certificate of Deposit – For the registration of Corporation
where the subscription to the Authorized Capital Stock (ACS) is
paid in cash;
◦ Special Audit Report – for application to the ACS of Corporations
where the subscription to the increase is paid in cash except (a)
listed companies; (b) public companies; (c) companies that offer
securities to the public; (d) payment to the subscription to the
increase is more than 10M.
◦ Primary Entry – For Deed of Assignment in the registration of new
corporations or increase in ACS where land or real estate property
is offered as consideration for subscription to shares of stocks
9
 Mandatory Incorporation of the Tax
Identification Number (TIN) of Foreign
Investors in All Forms, Papers, and
Documents filed with the SEC
◦ Initial application for registration;
◦ Application for amendment;
◦ General Information Sheet
10
 Guidelines on compliance with the Filipino-
Foreign Ownership requirements prescribed
in the constitution and/or existing laws by
corporations engaged in nationalized and
partly nationalized activities.
11
Amendment of the Principal Office Address
All other circulars, rules orders and issuances, or

parts thereof that are inconsistent with this
memorandum Circular are hereby repealed or
modified accordingly and This Circular shall take
effect immediately after its publication in a
newspaper of general circulation.
12
Principal Office Address of Corporations and
Partnerships
13
 Updated General Information Sheet (GI)
14
 Amended Guidelines Covering the Use of
Properties that Require Ownership
Registration as Paid-up Capital of
Corporation.
◦ Where the payment made is in the form of land –
applicant Corporation shall submit proof of transfer
of Ownership to the SEC within 120 days from the
date of approval of application
◦ Payment other than land - applicant Corporation
shall submit proof of transfer of Ownership to the
SEC within 90 days from the date of approval of
application
15
 Financial Statements to support an application
for a license to transact business in the
Philippines
◦ For those whose home country requires AFS, the
applicant shall submit the AFS as of date not
exceeding one (1) year immediately prior to the filing
of application;
◦ If the date of the AFS exceeds the one-year
requirement, the following shall be submitted:
 AFS that are available as of date of filing of the
application
 Unaudited FS as of date not exceeding 1 year
immediately prior to the filing of the application
16
◦ For those whose country does not require AFS, the
applicant shall submit the Unaudited FS as of date
not exceeding 1 year immediately prior to the filing
of the application provided that the UFS shall be
accompanied by a certification signed under oath
by an officer of a responsible regulatory institution
or by the applicant’s legal counsel that the
applicant is not required to prepare and submit
AFS, with a citation of the law or regulation on
which is is based
17
To facilitate requests for refund and re-application of
filing fees and excess penalties with the Company
Registration and Monitoring Department
Where the request for refund or re-application to

future transactions is made relative to an application
withdrawn prior to its approval, only fifty percent of
the filing fees paid thereon shall be refunded or
allowed to be re-applied to future transactions.
18
 Excess assessment of filing fees on
applications, resulting from error in the
computation thereof, the total excess amount
paid may be refunded or re-applied to future
transaction
- resulting factors solely attributable to the

corporation, in this case, the excess filing fee
paid shall be deemed forfeited in favor of the
commision
19
 Excess assessment of penalties, resulting
from the corporation’s late or non-submissions of
its prior compliance/s, the total excess penalty
paid shall be refunded or re-applied to the
corporation’s future transactions
- resulting from unflected reports or approved

applications in the SEC electronic records
- resulting of error in the computation
20
Guidelines governing the computation of corporate
term
Guidelines:
The first day of the corporate term is the date of incorporation
The last day of the corporate term is the day before corresponding
numbered day of the same month of incorporation in the last year of
the existence of a corporation in accordance with the pronouncement
of the Supreme Court in the case of Commissioner of Internal
Revenue
The Guidelines for the computation of the corporate term shall apply
prospectively
21
Guidelines for the Use of Notification Update Form for
Foreign Corporations
1.The form is a report to be accomplished and signed under
oath by the president or resident agent of the concerned
foreign corporation containing all information subject of any
change and other notifications to the Commission.
2.Must be submitted by the concerned foreign corporation

within 30 days from the occurrence of changes.
3.Allupdates contained in the form which remain effective at

the time when submission of the annual General Information
sheet becomes due and which are likewise required
information therein must be integrated in the said
General Information Sheet
22
4.Theform neither replaces nor dispenses with the requirement
of General Information Sheet which must be submitted within
30days.
5.This circular shall take effect fifteen days after its publication
23
Final Extension for Amendment of the Principal
Office Address
Due to a number of request that the said deadline be extended and

still numerous requests for amendments received and being filed in
CRMD by registrant corporations and partnerships complying with
SEC Memorandum Circular
The commission resolved to extend for the last time the period for
filing the applications for amendment of the articles of incorporation or
articles of partnership in relation to the principal office address until
31 December 2015.
24
 Reductions of copies of reports and other
filings with the Securities and Exchange
Commission ( March 15, 2010)
25
26
Reminders on the Preparation and Audit of
Annual Financial Statements
1.Preparation of FS
i. Management’s responsibility;
ii. Management should provide the ff to the auditors;
a. Complete set of financial statements;
b. All information that are relevant to the preparation and
presentation of financial statements;
c. All additional information that the auditor may request
from management;
d. Unrestricted access to records and personnel.
27
iii. The Company should neither allow nor require its
external auditors to prepare its financial statements or
any of its supporting documents;
iv. Signatures of the required signatories to the SMR;
v. Third paragraph in the SMR may be deleted for branch
or representative office;
2. Engagement of external auditor
i. Conduct due diligence

ii. Require the presentation of PRC license and BOA
certificate of accreditation
iii. Confirm the authenticity of BOA Certificate of
Accreditation
iv. Check the level of accreditation with the SEC
v. Verify the authenticity of the certificate
28
v. Monitor whether the external auditor is personally
conducting the audit or directly supervising the
audit staff;
vi. Engagement contract should be in writing;
vii. Copies of the ff should be kept by the Company:
 PRC License
 BOA Accreditation Certificate
 Commission’s certificate of accreditation
 Engagement Contract
 Minutes of conference with the auditors
29
 Amendment of Part I, Paragraphs 4(A) & (B) of
SRC Rule 68, as amended
◦ Documents to filed with the AFS and the IFS:

 Non-stock and non-profit organizations
 Schedule of Receipts or Income Other than Contributions
and Donations. This schedule shall provide the nature and
amount of item;
 Schedule of Contributions and Donations that is prepared
in accordance with the prescribed form;
 Schedule of Disbursements according to sources and
activities. The schedule shall provide the nature and
amount of each item. If material in amount, the details of
such disbursement shall like be indicated
30
Foundations
 Schedules as required in non-stock non profit
organization;
 Schedule of application of funds with the following
information on activities accomplished, on-going and
planned:
 Complete name, address and contact number of
project officer-in-charge;
 Complete address and contact number of the project
office.
 Copies of the certifications from the Office of the
Mayor or Head of DSWD or DOH on the existence of
the subject program or activity in the locality on
which it exercises jurisdiction.
31
Schedule of Contributions and Donations
Name of Foundation/Organization SEC Registration No.
For the year ended
(a) (b) (c) (d) (e)

No. Name and address Nationality Total Contributions Type of Contribution
1 ……………………………………………...… ……………………… P…………………… Cash

………………………………………...……… …… Noncash
…………………………………………….….. (Complete Part II if there is a
noncash contribution)
2 ……………………………………………...… ……………………… P…………………… Cash

………………………………………...……… …… Noncash
3 ……………………………………………...… ……………………… P…………………… Cash

………………………………………...……… …… Noncash
10 ……………………………………………...… ……………………… P…………………… Cash

………………………………………...……… …… Noncash
11 Others (aggregate of all contributions ……………………… P…………………… Cash

which are individually below P100,000.00) …… Noncash
– by nationality
32 SEC Presentation
Name of Foundation/Organization SEC Registration No.
For the year ended
(a) (b) (c) (d)

No. from Description of noncash property given Fair Market Value (or Date received
Part I estimate)
1 …………………………………………………………...…...… P ……………………… …………………………

…………………………………………………………...…...…
…………………………………………………………...…...…
2 …………………………………………………………...…...… P ……………………… …………………………

…………………………………………………………...…...…
…………………………………………………………...…...…
3 …………………………………………………………...…...… P ……………………… …………………………

…………………………………………………………...…...…
…………………………………………………………...…...…
4 …………………………………………………………...…...… P ……………………… …………………………

…………………………………………………………...…...…
…………………………………………………………...…...…
5 …………………………………………………………...…...… P ……………………… …………………………

…………………………………………………………...…...…
…………………………………………………………...…...…
6 …………………………………………………………...…...… P ……………………… …………………………

…………………………………………………………...…...…
…………………………………………………………...…...…
Signed under oath by the following:
Signature ______________________________ Signature___________________________________
Printed Name of President ________________ Printed Name of Treasurer _____________________
Signed this ____ day of _________
33 SEC Presentation
 For purposes of the aforementioned
requirements, contributions or donations
reportable on the schedules mentioned shall
be grants, bequest, devices, and gifts of
money or property amounting to P100,000 or
more from each contributor or donor. A
contributor or donor includes individuals,
partnerships, corporations, associations,
trusts and organizations
34
I. Filing dates of FS for FY ending 12/31/15
◦ April 18, 19 , 20, 21, 22 : 1&2

◦ April 25, 26, 28, 28, 29 : 3&4
◦ May 2, 3, 4, 5, 6 : 5&6
◦ May 10, 11, 12, 13 : 7&8
◦ May 16, 17, 18, 19, 20 : 9&0
I. Prior to April 18, all Corporation may file their

FS regardless of last numerical digits
II. Late filing shall be accepted starting May 23
35
II. All reports
 All filers regardless of the number of reports

to be filed at SEC following the circularized
SEC-issued number coding schedule may
choose to avail of courier filing options and
select any courier of their choice.
a) SEC Express Nationwide Submission(SENS)

b) Any Courier/Regular Mail
36
III. General Information Sheet
 All corporation shall file their GIS within 30 calendar days

from:
a) Stock Corporations – date of annual stockholders meeting PER
By-Laws.
b) Non-Stock Corporations – date annual member meeting PER
By-Laws
c) Foreign Corporations – anniversary date of the issuance of the
SEC License.
37
 Fiscal year ends other than 12/31/12 – within
120 days after the end of fiscal year;
 Listed with the PSE – Due date as atached to
the annual report (SEC Form 17-A)

 Entities audited by COA
◦ Affidavit signed by the President and Treasurer

attesting to the fact that the Company timely
provided COA with the FS and supporting
documents and that the audit of COA has just been
concluded;
◦ A letter from COA confirming the information
provided in the affidavit.
38
Filling of sworn statement and certificate of
existence of project separate from the filing of
financial statements
The due date for the submission of SS and CEP is the same as the
due date for the submission of the Annual Financial Statements
(AFS);
The SS and CEP shall have a coversheet separate and distinct from
the coversheet of the AFS;
Theletters “SSCEP” shall be indicated in the five boxes provided for

“FORM TYPE” in the coversheet for SS and or CEP
39
40
 Ordinary corporations with no secondary
license that propose to receive or transfer
property in exchange for shares of stocks
◦ Property valuer licensed by the DTI or the Philippine
Regulatory board of real estate service
◦ Note: Public Companies and Secondary Licensees

that adopted fair value model for PPE are required
to get an SEC accredited appraiser.
41
 Adoption of the following standards and
interpretations:
◦ PFRS 9 – Financial Instruments, Classification and
Measurement (1/1/13)
◦ PAS 24 – Related Party Disclosure (1/1/11)
◦ IFRIC 19 – Extinguishing financial liabilities with
equity instruments (1/1/10)
◦ Amendments to PFRS 1 – Additional Exemption
from first-time adopters (1/1/10)
◦ Amendments to PAS 32 – classification of rights
issues (2/1/10)
42
 Mandatory adoption of PFRS 9 (From
01/01/13 to 01/01/15)
 Conditions:
◦ Covered Companies shall conduct a study every 2 nd

quarter of the fiscal year up to 2014 of the impact
of early adoption
◦ Covered companies required to submit interim FS:
 Interim FS starting with the period ended June 30,
2012 up to June 30, 2014 shall contain a disclosure on
whether or not
 the company conducted an evaluation;
 The company will early adopt PFRS 9.
43
 Transition to new and amended Philippine
Financial Reporting Standards effective
starting 1 January 2013
◦ Covered corporations shall present the prescribed
information and to recognize the impact of the
following standards in their interim FS starting with
the period ended June 30, 2013:
 PAS 27 (amended) – Separate Financial Statements;
 PAS 28 (amended) – Investment in Associates and JV;
 Amendments to PFRS 7
 PFRS 10 – Consolidated Financial Statements
 PFRS 11 – Joint Arrangements;
 PFRS 12 – Disclosure of Interest in Other entities;
 PFRS 13 – Fair Value Measurement
44
Interim FS as of March 30, 2013 shall contain
the following disclosures:
◦ Whether or not the above standards are applicable

to the company;
◦ If yes, whether or not the company is currently
evaluating the impact based on the audited figures
as of December 31, 2012.
45
46
FINALITY OF MASS REVOCATION ORDERS
 Finality of mass revocation orders extended:
 New Schedule:
Year Date of Order Date of Deadline to

Registered Revocation File Petition to
Lift Revocation
1936-1966 Apr 22, 2003 May 26, 2003 Dec. 31, 2013
1967-1975 May 27, 2003 July 02, 2003 Dec. 31, 2013
1976-1984 July 8, 2003 Aug 11, 2003 Dec. 31, 2013
1985-1991 Aug 20, 2003 Sept 29, 2003 Dec. 31, 2013
1992-1995 Sept 30, 2003 Nov 3, 2003 Dec. 31, 2013
1996-1997 Feb 10, 2004 Mar 15, 2004 Dec. 31, 2014
1998-1999 Oct 25, 2005 Dec 1, 2005 Dec. 31, 2015
2000 June 27, 2006 Aug 2, 2006 Dec. 31, 2016
47
1. MC-22 (Finality of the Revocation Orders
covering 2001-2006 registered corporations
including those corporations covered by
Suspension Orders and Revocation Orders
published by SEC Extension Offices)
48
FINALITY OF MASS REVOCATION ORDERS
 Finality of mass revocation orders extended:
 New Schedule:
YEARS REGISTERED/ DATE OF ORDER DATE OF PUBLICATION DATE OF REVOCATION

COVERED
CORPORATION
Corporations covered by December 28, 2001 January 21, 2002 February 20, 2002
Suspension Orders(1st
Batch)
Corporations covered by July 29, 2002 August 7, 2002 September 6, 2002
Suspension Orders (2nd
Batch)
2001 (1st Batch) September 28, 2007 October 16, 2007 November 16, 2007
2001 (2nd Batch) April 15, 2009 April 25, 2009 May 26, 2009
2002 – 2003 November 4, 2011 December 4, 2011 January 3, 2012
(Implemented by SEC
Baguio Extension Office)
49
COVERED
CORPORATION
2002-2003 November 4, 2011 December 7, 2011 January 6, 2012
(implemented by SEC
Cebu Extension Office)
2002-2003 November 4, 2011 December 6, 2011 January 5, 2012
(implemented by SEC
Cagayan de Oro Extension
Office)
2002-2003 November 4, 2011 January 15, 2002 February 15, 2012

(implemented by SEC
Legaspi Extension Office)
2002-2003 November 4, 2011 November 17, 2011 December 17, 2011

(implemented by SEC
Zamboanga Extension
Office)
2002 December 9, 2011 December 16, 2011 January 15, 2012

(Main Office)
2002 December 9, 2011 January 27, 2012 February 27, 2013
(Implemented by SEC
Davao Extension Office)
2003 December 9, 2011 December 16, 2011 January 19, 2012
(Main Office)
2004 June 18, 2012 June 28, 2012 July 29, 2012
50
COVERED
CORPORATION
2005 December 12, 2012 December 12 2012 January 618 2013
2002-2004 March 8, 2013 April 1, 2013 September 2, 2013

(extended period of
compliance by virtue of
SEC Order dated July 15,
2013)
2006 June 24, 2013 July 2, 2013 August 1, 2013
51
 Guidelines on Applications for Re-registration
of Corporations with Dissolved or Revoked
Certificates of Registration.
◦ Name of Corporation or Partnership that has been
dissolved shall not be used within:
 3 years from the date of approval of dissolution
 6 years from the date of revocation
◦ Unless allowed by the majority outstanding capital
stock or membership at the time of
dissolution/revocation
52
 Board Resolution by the hold-over board of
trustees/directors attesting that:
◦ The applicant for re-registration is a new corporation
intending to use the name of the dissolved or revoked
corporation;
◦ The re-registration is approved by the majority vote of the
directors/trustees and vote of the stockholders representing
the majority of the outstanding capitals stock and
membership;
◦ They shall include in the statement in the articles of
incorporation of the new corporation that the same is using
the name of the dissolved or revoked corporation
◦ If applicable, they will no longer file a petition to set aside
the order of revocation;
53
 Latest GIS of the dissolved/revoked
corporation stamped “received” by the SEC;
 Affidavit by the hold-over secretary attesting
that:
◦ The are no properties owned;
◦ In case there are properties owned, no property is
transferred to the new corporation or in the case of
stock corporation used for subscription payment
without undergoing corporate liquidation process;
54
In order to enhance the reliability and Integrity of the
beginning balances of financial statements that are
being submitted in support of a Petition to Lift Order
of Revocation of Primary Registration
Company’s certification as one of the sworn

statements in the Petition
Sworn certification by the external auditor that shall

be submitted as one of the supporting documents to
the Petition
55
56
Additional Requirement for Accreditation as
Auditing Firm/Sole Practitioner
Existing accredited auditing firms/sole

practitioners are required to submit said
Disclosure within 30 days from the date of
effectivity of this Memorandum Circular
57
58
 Single Borrower Limit (SBL) and Credit Limit on
Directors, Officers, Stockholders and Related
Interests (DOSRI)
◦ The total credit that a lending company may extend
to its directors, officers and stockholder shall not
exceed 15% of its networth;
◦ Loans and other credit extended to the following
related interest shall be deemed extended ot its
directors, officers and stockholders:
 Spouse or relatives within the first degree of
consanguinity or affinity, or relatives by legal adoption,
of the officer, director or stockholder of the lending
company;
59
 Partnership in which a director or officer or
stockholder of the lending company, or their spouse or
relatives referred to in the preceding item is a general
partner;
 Corporations where a director or officer or stockholder
of the lending company, or their spouse or relatives
referred to in the item I is also a director or officer of
the corporation;
 Corporations where more than 20% of its subscribed
capital stock is owned by a director or officer or
stockholders of the lending company or their spouse
or relatives referred to in item i
60
 Amendments of rules pertaining to the date
of submission of the Interim Semi-annual
Financial Statements
◦ Financing and Lending Companies shall submit
ISAFS within 45 days from the end of the interim
semi-annual period covered by the report;
61
62
Scale of Fines for Non-compliance with the
Financial Reporting Requirements of the
Commission (7/15/09)
Note:
1.Definition of retained earnings
2.Reckoning date of computation of penalty
 From the date violation is discovered
 Up to the time that a sufficient & meritorious
explanation, board resolution, and the corrective
measures to be taken are submitted
63
ORDINARY CORPORATIONS WITH NO SECONDARY LICENSE ISSUED BY
THE COMMISSION
Material deficiency in the financial statements or non-compliance with the

requirements of the Rules
1st 2nd 3rd

Offense Offense Offense
Stock corporations Deficit P 500 P 1,000 P 2,000
Capital Deficiency 300 600 1,200
Retained Earnings:
0 to P100,000 P 500 P 1,000 P 2,000
P 100,001 to P 500,000 1,000 2,000 4,000
64
P 500,001 to P 5,000,000 2,000 4,000 8,000
P 5,000,001 to P 10,000,000 3,000 6,000 12,000
Above P 10,000,000 4,000 8,000 16,000

Non-stock Corporations Negative Fund Balance P 200 P 400 P 800
Fund Balance/Equity Up to P100,000 P 300 P 600 1,200
P 100,001 to P 500,000 500 1,000 2,000
P 500,001 to P 10,000,000 1,000 2,000 4,000
Above P 10,000,000 2,000 4,000 8,000
65
Material misstatement in the financial statements
1st Offense 2nd Offense 3rd Offense
An amount based on An amount based An amount based on

the above scale or on the above scale the above scale or 4/10
1/10 of 1% of the or 2/10 of 1% of the of 1% of the amount of
amount of amount of misstatement,
misstatement, misstatement whichever is higher
whichever is higher whichever is higher
66
BRANCHES AND REGIONAL OFFICES OF FOREIGN CORPORATIONS
LICENSED TO OPERATE IN THE PHILIPPINES BY THE COMMISSION

1st 2nd 3rd

Net Cash Receipts

0 to P 100,000
P 500 P 1,000 P 2,000
P 100,001 to P 500,000 P 1,000 P 2,000 P 4,000
P 500,001 to P 5,000,000 P 2,000 P 4,000 P 8,000
P 5,000,001 to P 10,000,000 P 3,000 P 6,000 P 12,000
Above P 10,000,000 P 4,000 P 8,000 P 16,000

67
BRANCHES AND REGIONAL OFFICES OF FOREIGN CORPORATIONS
LICENSED TO OPERATE IN THE PHILIPPINES BY THE COMMISSION
An amount based on the An amount based on the An amount based on the

above scale or 1/10 of 1% above scale or 2/10 of above scale or 4/10 of
of the amount of 1% of the amount of 1% of the amount of
misstatement, whichever is misstatement whichever misstatement, whichever
higher is higher is higher
68
LENDING COMPANIES; TRANSFER AGENTS - AFS

Deficit P 500 P 1,000 P 2,000

Retained Earnings:
Up to P100,000 P 1,000 P 2,000 P 4,000
P 100,001 to P 500,000 2,000 4,000 8,000
P 500,001 to P 5,000,000 3,000 6,000 12,000
P 5,000,001 to P 10,000,000 4,000 8,000 16,000
Above P 10,000,000 5,000 10,000 20,000
69
LENDING COMPANIES; TRANSFER AGENTS - AFS

70
LENDING COMPANIES; TRANSFER AGENTS – INTERIM-FS

1st 2nd 3rd

Deficit P 100 P 200 P 400

Retained Earnings:
Up to P100,000 P 200 P 400 P 800
P 100,001 to P 500,000 400 800 1,600
P 500,001 to P 5,000,000 600 1,200 2,400
P 5,000,001 to P 10,000,000 800 1,600 3,200
Above P 10,000,000 1,000 2,000 4,000
71
LENDING COMPANIES; TRANSFER AGENTS – INTERIM-FS

72
FINANCING COMPANIES-AFS

1st 2nd 3rd

Deficit P 1,000 P 2,000 P 4,000

Retained Earnings:
Up to P100,000 P 2,000 P 4,000 P 8,000
P 100,001 to P 500,000 3,000 6,000 12,000
P 500,001 to P 5,000,000 4,000 8,000 16,000
P 5,000,001 to P 10,000,000 5,000 10,000 20,000
Above P 10,000,000 6,000 12,000 24,000
73
FINANCING COMPANIES-AFS

74
FINANCING COMPANIES-INTERIM FS

75
BROKERS AND DEALERS OF SECURITIES; - AFS
Government Securities Eligible Dealers (GSEDs)

1st 2nd 3rd
Deficit P 2,500 P 5,000 P 10,000

Retained Earnings:
Up to P1,000,000 P 5,000 P 10,000 P 20,000
P 1,000,001 to P 10,000,000 6,000 12,000 24,000
P 10,000,001 to P 20,000,000 7,000 14,000 28,000
P 20,000,001 to P 30,000,000 8,000 16,000 32,000
Above P 30,000,000 9,000 18,000 36,000
76
BROKERS AND DEALERS OF SECURITIES; - INTERIM FS

Deficit P 500 P 1,000 P 2,000

Retained Earnings:
Up to P1,000,000 P 1,000 P 2,000 P 4,000
P 1,000,001 to P 10,000,000 2,000 4,000 8,000
P 10,000,001 to P 20,000,000 3,000 6,000 12,000
P 20,000,001 to P 30,000,000 4,000 8,000 16,000
Above P 30,000,000 5,000 10,000 20,000
77
BROKERS AND DEALERS OF SECURITIES; - INTERIM FS

78
INVESTMENT HOUSES - AFS
Universal Banks Registered as Underwriters of Securities
Investment Company Advisers

Deficit P 5,000 P 10,000 P 20,000

Retained Earnings:
Up to P5,000,000 P 10,000 P 20,000 P 40,000
P 5,000,001 to P 15,000,000 11,000 22,000 44,000
P 15,000,001 to P 30,000,000 12,000 24,000 48,000
P 30,000,001 to P 50,000,000 13,000 26,000 52,000
Above P 50,000,000 14,000 28,000 56,000
79
INVESTMENT HOUSES - AFS

80
FINANCING COMPANIES-INTERIM FS

1st 2nd 3rd

Deficit P 400 P 800 P 1,600

Retained Earnings:
Up to P100,000 P 600 P 1,200 P 2,400
P 100,001 to P 500,000 800 1,600 3,200
P 500,001 to P 5,000,000 1,000 2,000 4,000
P 5,000,001 to P 10,000,000 1,200 2,400 4,800
Above P 10,000,000 1,400 2,800 5,600
81
INVESTMENT HOUSES – INTERIM FS

Deficit P 1,000 P 2,000 P 4,000

Retained Earnings:
Up to P5,000,000 P 3,000 P 6,000 P 12,000
P 5,000,001 to P 15,000,000 4,000 8,000 16,000
P 15,000,001 to P 30,000,000 5,000 10,000 20,000
P 30,000,001 to P 50,000,000 6,000 12,000 24,000
Above P 50,000,000 7,000 14,000 28,000
82
INVESTMENT HOUSES – INTERIM FS

misstatement, whichever misstatement whichever misstatement, whichever
is higher is higher is higher
83
CLEARING AGENCY AND CLEARING AGENCY AS DEPOSITORY - AFS
Stock and Securities Exchange/s

Deficit P 10,000 P 20,000 P 40,000

Retained Earnings:
Up to P 10,000,000 P 20,000 P 40,000 P 80,000
P 10,000,001 to P 20,000,000 21,000 42,000 84,000
P 20,000,001 to P 50,000,000 22,000 44,000 88,000
P 50,000,001 to P 100,000,000 23,000 46,000 92,000
Above P 100,000,000 24,000 48,000 96,000
84
CLEARING AGENCY AND CLEARING AGENCY AS DEPOSITORY - AFS

85
CLEARING AGENCY AND CLEARING AGENCY AS DEPOSITORY - IFS

Deficit P 4,000 P 8,000 P 16,000

Retained Earnings:
Up to P 10,000,000 P 5,000 P 10,000 P 20,000
P 10,000,001 to P 20,000,000 6,000 12,000 24,000
P 20,000,001 to P 50,000,000 7,000 14,000 28,000
P 50,000,001 to P 100,000,000 8,000 16,000 32,000
Above P 100,000,000 9,000 18,000 36,000
86
CLEARING AGENCY AND CLEARING AGENCY AS DEPOSITORY - IFS

87
PRENEED COMPANIES - AFS

Active1: Active: Active:

P 25,000 P 50,000 P 100,000
Inactive2: Inactive: Inactive:
P 12,500 P 25,000 P 50,000
88
PRENEED COMPANIES - AFS
Material misstatement in the financial Active: Active: Active:

statements P 25,000 P 50,000 P 50,000
Inactive: Inactive: Inactive:
P 12,500 P 25,000 P 25,000

Failure to comply with the Active: Active: Active:
requirements of PNUCA P 25,000 P 50,000 P 100,000
Inactive: Inactive: Inactive:
P 12,500 P 25,000 P 50,000
89
PRENEED COMPANIES - IFS
Violation 1st Offense 2nd Offense 3rd Offense
Material deficiency in the financial Active1: Active: Active:

statements or non-compliance P 5,000 P 10,000 P 20,000
with the requirements of the Inactive2: Inactive: Inactive:
Rules
P 2,500 P 5,000 P 10,000
Material misstatement in the Active1: Active: Active:
financial statements P 5,000 P 10,000 P 20,000
P 2,500 P 5,000 P 10,000
Failure to comply with the Active1: Active: Active:
requirements of PNUCA P 5,000 P 10,000 P 20,000
90
P 2,500 P 5,000 P 10,000
ISSUES OF SECURITIES REGISTERED UNDER THE SRC AND PUBLIC
COMPANIES - AFS
2nd
Violation 1st Offense Offense 3rd Offense
Material deficiency in the P 50,000
financial statements or non- P 25,000 plus P500 P 100,000 plus
plus P1,000
compliance with the per day until P2,000 per day
per day until
requirements of the Rules until completed/
completed/ complied completed/
complied
complied
Material misstatement in the P 50,000 or 1/10 of P 100,000 P 200,000 or
financial statements 1% of the amount of or 1/10 of 1/10 of 4% of the
misstatement, 2% of the amount of
whichever is higher, amount of misstatement,
plus P 500 per day misstateme whichever is
until corrected nt, higher, plus P
whichever is 1,000 per day
higher, plus until corrected
P 1,000 per
day until
91 corrected
ISSUES OF SECURITIES REGISTERED UNDER THE SRC AND PUBLIC
COMPANIES - IFS
Violation 1st Offense 2nd Offense 3rd Offense
Material deficiency
in the financial P 20,000 plus P P 100,000 plus
P 10,000 plus P100 per
statements or non- 500 per day until P2,000 per day
day until completed/
compliance with completed/ until completed/
complied
the requirements complied complied
of the Rules
Material P 25,000 or 1/10 of 1% of P 50,000 or 1/10 P 100,000 or
misstatement in the amount of of 2% of the 1/10 of 4% of the
the financial misstatement, whichever amount of amount of
statements is higher, plus P 500 per misstatement, misstatement,
day until corrected whichever is whichever is
higher, plus P higher, plus P
1,000 per day until 1,000 per day
corrected until corrected
92
 Fourth Violation
◦ Corporations holding secondary license
 Suspension of license for 60 days
 200% of the fine for the 3rd offense
 Failure to pay shall be a ground for revocation of the
Company’s license
◦ Corporations with no secondary license

 200% of the fine for the 3rd offense
 Warning that subsequent violation could be a ground for
revocation of license
 Failure to pay shall be a ground for revocation of the
Company’s license
93
 Fifth violation
◦ Corporations holding secondary license
 Revocation of license
 200% of the fine for the 4th offense
◦ Corporations with no secondary license

 Revocation of license
 200% of the fine for the 4th offense
 Note:
◦ Non payment shall constitute a derogatory record on the
part of the directors and officers
◦ Revocation/suspension shall not affect civil and criminal
liability
94
 Material deficiency
◦ Non-submission of any of the ff:

 Statements of Financial Position
 Statements of Comprehensive Income / Statements of receipts
and disbursements;
 Statements of Cash Flows;
 Statements of Changes in Equity / Fund Balance
 Notes to Financial Statements
 Auditor’s Report
 Statement of Management’s Responsibility
95
◦ Auditors report is not compliant with the wording prescribed by
PSA 700, as revised, and other applicable auditing standards
◦ Qualified opinion for listed company, public company, mutual fund
or issuer of securities to public
◦ Statement of management’s responsibility is not signed by the
prescribed signatories or not notarized in the case of listed public
company
◦ Any of the required disclosures and presentation under the
applicable financial reporting framework and SRC Rule 68/68.1 for a
significant account is not provided in the financial statements. In
case however of disclosures on related party transactions as
required under PAS 24, any deficiency thereof shall be considered
material whether or not the amount involved in the said transaction
is significant
◦ There is no accounting policy for a significant account
96
For purposes of these Guidelines, a significant account means a Balance
Sheet or Income Statement item, the amount of which is equivalent to:
For listed companies, public companies, mutual fund,

other issuers of securities to the public and pre-need companies
1.5% or more of Total Current Asset, if it is one of the current asset items;
2.5% or more of Total Non-Current Asset, if it is one of the non-current
asset items;
3.5% or more of Total Current Liabilities, if it is one the current liabilities
items;
4.5% or more of Total Long-Term Liabilities, if it is one of the long-term
liabilities items;
5.5% or more of the Total Stockholders’ Equity, if it is one of the equity
items or the amount of Total Assets if there is capital deficiency;
6.5% or more of the Net Income, if it is one of the Income Statement items.
For all other corporations, the threshold would be 10% or more of the
items mentioned above.
97
◦ Five (5) of more of the following minor disclosure deficiencies:
(a) The financial statements is not presented in the prescribed comparative format;
(b) There is no distinction between the current and non-current portion of assets or
liabilities;
(c) There are no cross-references to the notes to financial statements;
(d) One of the schedules required under SRC Rule 68.1 is not provided (applicable
for listed companies, public companies, mutual funds and other issuers of
securities to the public);
(e) One or two disclosure items are not provided for an insignificant account, the
non-disclosure of which do not affect the fair presentation of the financial
statements;
(f) The information not provided may be derived or computed based on other
financial items such as earnings per share, net asset value, that presented in the
same financial statements;
(g) There is no breakdown or explanatory note on accrued expenses, miscellaneous
or other accounts, the amount of which is not significant;
(h) The Statement of Management’s Responsibility is not signed by one of the
required signatories or is not notarized in case of a listed or public company;
(i) Other minor disclosure deficiencies or misstatements, as the Commission may
determine.
98
 Material Misstatement
◦ An accounting policy for a significant account is not consistent

with PFRS or GAAP, e.g., for non-publicly accountable entities;
◦ An accounting policy for a significant account is not consistently
applied between periods or to similar transactions and events
(consistency in application);
◦ The estimate or assumption used resulted to a material
misstatement;
◦ There are more than one (1) minor misstatement and the aggregate
amount involved for said misstatements meets the test of
materiality;
◦ The financial statements of a corporation with a subsidiary or
subsidiaries are not presented on a consolidation basis in violation
of PAS 27;
◦ Other deficiency or misstatement that the Commission may
consider material.
99
10
2

2.memorandum Circulars

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2.memorandum Circulars

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MEMORANDUM

Application for registration/amendment of articles

A Corporation may, at its option, request that its

A.Investment(s) – By entities organized as investment house or

A.The corporate name shall contain the word “Corporation” or

The commission in its meeting on June 2, 2015, resolved to amend

All other circulars, rules orders and issuances, or

Where the request for refund or re-application to

- resulting factors solely attributable to the

- resulting from unflected reports or approved

- resulting of error in the computation

2.Must be submitted by the concerned foreign corporation

3.Allupdates contained in the form which remain effective at

Due to a number of request that the said deadline be extended and

2. Engagement of external auditor

i. Conduct due diligence

◦ Documents to filed with the AFS and the IFS:

For the year ended

(a) (b) (c) (d) (e)

1 ……………………………………………...… ……………………… P…………………… Cash

2 ……………………………………………...… ……………………… P…………………… Cash

3 ……………………………………………...… ……………………… P…………………… Cash

10 ……………………………………………...… ……………………… P…………………… Cash

11 Others (aggregate of all contributions ……………………… P…………………… Cash

For the year ended

(a) (b) (c) (d)

1 …………………………………………………………...…...… P ……………………… …………………………

2 …………………………………………………………...…...… P ……………………… …………………………

3 …………………………………………………………...…...… P ……………………… …………………………

4 …………………………………………………………...…...… P ……………………… …………………………

5 …………………………………………………………...…...… P ……………………… …………………………

6 …………………………………………………………...…...… P ……………………… …………………………

◦ April 18, 19 , 20, 21, 22 : 1&2

I. Prior to April 18, all Corporation may file their

 All filers regardless of the number of reports

a) SEC Express Nationwide Submission(SENS)

 All corporation shall file their GIS within 30 calendar days

the annual report (SEC Form 17-A)

◦ Affidavit signed by the President and Treasurer

Theletters “SSCEP” shall be indicated in the five boxes provided for

◦ Note: Public Companies and Secondary Licensees

◦ Covered Companies shall conduct a study every 2 nd

◦ Whether or not the above standards are applicable

Year Date of Order Date of Deadline to

YEARS REGISTERED/ DATE OF ORDER DATE OF PUBLICATION DATE OF REVOCATION

2002-2003 November 4, 2011 January 15, 2002 February 15, 2012

2002-2003 November 4, 2011 November 17, 2011 December 17, 2011

2002 December 9, 2011 December 16, 2011 January 15, 2012

2002-2004 March 8, 2013 April 1, 2013 September 2, 2013

Company’s certification as one of the sworn

Sworn certification by the external auditor that shall

Existing accredited auditing firms/sole

Material deficiency in the financial statements or non-compliance with the

1st 2nd 3rd

P 100,001 to P 500,000 1,000 2,000 4,000

P 5,000,001 to P 10,000,000 3,000 6,000 12,000

Above P 10,000,000 4,000 8,000 16,000

1st Offense 2nd Offense 3rd Offense

An amount based on An amount based An amount based on

Material deficiency in the financial statements or non-compliance with the

1st 2nd 3rd

Net Cash Receipts

P 100,001 to P 500,000 P 1,000 P 2,000 P 4,000