TAX ALERTS - dmdcpa.com.ph ALERTS visit us on ... amended by RA 7798) Education Act is enacted to establish and maintain a complete, adequate and

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Diaz Murillo Dalupan & Co. CPAs an independent member firm of

Tax and Corporate Services Division

TAX ALERTS visit us on www.dmdcpa.com.ph

Securities and Exchange Commission’s

(SEC) Mandate and Functions

Securities Regulation Code (RA 8799)

Corporation Code of the Philippines (BP

68)

PD 902-A as amended (except for

sections repealed by RA 8799)

Investment Houses Law (PD 129 as

amended by RA 8366)

Investment Company Act (RA 2629)

Financing Company Act (RA 5980 as

amended by RA 8556)

Lending Company Regulation Act (RA

9474)

Credit Information System Act (RA 9510)

Securitization Act of 2004 (RA 9267)

Special Purpose Vehicle (RA 9182)

MAIN OFFICE:

7th & 8th Floors, Don Jacinto Bldg.,

Dela Rosa cor. Salcedo Streets,

Legaspi Village, Makati City

Tel no. +63 (2)894-5892 to 95

REGIONAL OFFICES:

Batangas Branch Office:

Unit 4-YCP Business Center

J.P. Laurel Highway,

Lipa City, Batangas

Phone: +63(043)757-5241

Cebu Branch Office:

Unit 504 Cebu Holdings Center

Cebu Business Park, Mabolo, Cebu City

Phone: +63(32)415-8108; 415-8109;

415-8110

Fax: +63(32)232-8029 to 10

Davao Branch Office:

3rd Floor Bldg. B. Plaza Luisa

Ramon Magsaysay Avenue,

Davao City

Phone +63(82)222-6636

February 2012

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http://www.dmdcpa.com.ph

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Anti- Money Laundering Law (RA 9160

as amended by RA 9194)

Retail Trade Liberalization Act of 2000

(RA 8762)

Omnibus Investments Code (E.O. 226,

Book III)

Foreign Investments Company Act

(RA 7042)

Education Act of 1982 (BP 232 as

amended

by RA 7798)

Anti- Dummy Law (CA 108)

Personal Equity and Retirement Account

Act

(RA 9505)

The Core Functions Of SEC

Capital Market Development and

Regulation

Company Registration

Enforcement

Support Services

The Special Offices

Office of the General Counsel (OGC)

Office of the General Accountant

(OGA)

The Extension Offices

Reportorial Requirements

What laws govern the submission of

reports to the SEC?

Who should file reports with the SEC?

What reports should registered

corporations file with the SEC?

What are the specifications of the GIS,

AFS, General and Special FS reports?

Where can one obtain blank GIS,

General and Special FS forms?

Where can one obtain blank SEC

forms for reports required of

corporations with secondary licenses?

General Information Sheet (GIS)

Requirements of SEC on Financial

Statements (FS)

Required entities to use Electronic

Copy/Diskette of GIS and AFS

Securities and Exchange Commission’s

fees and charges

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Securities and Exchange

Commission’s Mandate and

Functions

The Securities and Exchange

Commission (SEC) is the

government mandated to

implement the following laws:

Securities Regulation Code (RA

8799)

SRC is enacted to govern the sale

of shares of stocks of publicly

listed companies. It is the policy

of the State to encourage widest

participation of ownership in

enterprises and to promote the

development of capital market

and protect investors. It ensure

full and fair disclosure of

securities and minimize if not

totally eliminate insider trading

and other fraudulent or

manipulative devices and

practices which create distortions

in the free market.

Corporation Code of the

Philippines (BP 68)

The Corporation Code is the law

governing stocks and non-stocks

corporations, close and special

corporations as well as foreign

corporation registered in the

Philippines.

PD 902-A as amended (except for

sections repealed by RA 8799)

It is the reorganization of the SEC

with additional powers and

placing such agency under

administrative supervision of the

Office of the President.

Investment Houses Law (PD 129


The Investment Houses Law is

enacted to liberalize the

Philippine Investment Houses

thus increasing foreign equity

participation and raising the

minimum capitalization of

investment houses to enable

them to meet the present and

future demands of the market.

Investment Company Act (RA

2629)

A law governing investment

companies as well as elimination

of certain conditions which

adversely affect the national

public interest and the interest of

investors.

Financing Company Act (RA 5980


The law which regulate and

promote the activities of

financing and leasing companies

to place their operations on a

sound, competitive, stable and

efficient basis as other financial

institutions. Enacted to curtail

and prevent acts or practices

prejudicial to the public interest

so that financing companies may

be in a better position to extend

efficient service in a fair manner

to the general public and to

industry, commerce and

agriculture and thereby more

fully contribute to the sound

development of the national

economy.

Lending Company Regulation Act

(RA 9474)

It is enacted to regulate the

establishment of lending

companies and to place their

operation on a sound, efficient

and stable condition to derive the

optimum advantages from them

as an additional source of credit.

The law also governs the

prevention and mitigation, as far

as practicable, practices

prejudicial to public interest and

lay down the minimum

requirements and standards

under which they may be

established and do business

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Credit Information System Act

(RA 9510)

Credit Information System Act is

consistent with the need to

establish a comprehensive and

centralized credit information

system for the collection and

dissemination of fair and

accurate information relevant to,

or arising from, credit and credit-

related activities of all entities

participating in the financial

system. A credit information

system will directly address the

need for reliable credit

information concerning the credit

standing and track record of

borrowers.

SEC is also involved in the

enforcement of:

Securitization Act of 2004 (RA

9267)

Securitization Act is enacted to

promote the development of the

capital market by supporting

securitization, by providing a

legal and regulatory framework

for securitization and by creating

a favorable market environment

for a range of asset-backed

securities. For this purpose, the

State rationalize the rules,

regulations, and laws that impact

upon the securitization process,

particularly on matters of

taxation and sale of real estate

on installment.

Special Purpose Vehicle (RA 9182)

A special purpose vehicle entity is

established for purpose

converting the non-performing

assets of a company into cash.

Such entity is exempt from

income tax and value added tax.

Anti- Money Laundering Law (RA

9160 as amended by RA 9194)

AMLA is enacted to protect and

preserve the integrity and

confidentiality of bank accounts

and to ensure that the

Philippines shall not be used as a

money laundering site for the

proceeds of any unlawful

activity.

Retail Trade Liberalization Act of

2000 (RA 8762)

Retail Trade Liberalization Act is

enacted to promote consumer

welfare in attracting, promoting

and welcoming productive

investments that will bring down

prices for the Filipino consumer,

create more jobs, promote

tourism, assist small

manufacturers, stimulate

economic growth and enable

Philippine goods and services to

become globally competitive

through the liberalization of the

retail trade sector.

Civil Code (specifically, the

provisions on partnerships)

The Law on Partnership is a law

governing the determination and

establishment of a partnership

whether universal or particular

partnership, and general

professional partnership.

Omnibus Investments Code (E.O.

226, Book III)

Omnibus Investment Code is

enacted to encourage private

Filipino and foreign investments in

industry, agriculture, forestry,

mining, tourism and other sectors of

the economy. To promote increase

productivity of the land, minerals,

forestry, aquatic and other

resources of the country, and

improve utilization of the products

thereof; improve technical skills of

the people employed in the

enterprise; provide a foundation for

the future development of the

economy; meet the tests of

international competitiveness;

accelerate development of less

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developed regions of the country;

and result in increased volume and

value of exports for the economy.

Foreign Investments Company

Act (RA 7042)

An act to promote foreign

investments, prescribe the

procedures for registering

enterprises doing business in the

Philippines, and other purposes.

This law is enacted to attract,

promote and welcome

productive investments from

foreign individuals, partnerships,

corporations, and governments,

including their political

subdivisions, in activities which

significantly contribute to

national industrialization and

socioeconomic development to

the extent that foreign

investment is allowed in such

activity by the Constitution and

relevant laws. Foreign

investments shall encouraged

enterprises that significantly

expand livelihood and

employment opportunities for

Filipinos; enhance economic

value of farm products; promote

the welfare of Filipino

consumers; expand the scope,

quality and volume of exports

and their access to foreign

markets; and/or transfer relevant

technologies in agriculture,

industry and support services.

Foreign investments shall be

welcome as a supplement to

Filipino capital and technology in

those enterprises serving mainly

the domestic market.

Education Act of 1982 (BP 232 as

amended by RA 7798)

Education Act is enacted to

establish and maintain a

complete, adequate and

integrated system of education

relevant to the goals of national

development. Toward this end,

the government shall ensure,

within the context of a free and

democratic system, maximum

contribution of the educational

system to the attainment of

national developmental goals.

Anti- Dummy Law (CA 108)

Anti-dummy law provides

punishments for the evasion of

the laws on the nationalization of

certain rights, franchises or

privileges. An example of which is

a nationalized corporation in

papers owned by Filipinos but in

reality owned by foreign

investors.

Personal Equity and Retirement

Account Act (RA 9505)

Personal Equity and Retirement Account (PERA) Act is enacted to establish a provident personal savings plan. It is in conjunction to the policy of the State to promote capital market development and savings mobilization by establishing a legal and regulatory framework of retirement plans for persons, comprised of voluntary personal savings and investments. The State recognizes the potential contribution of PERA to long-term fiscal sustainability through the provision of long-term financing and reduction of social pension benefits.

The Core Functions

CAPITAL MARKET DEVELOPMENT

AND REGULATION

Market Department (MRD)

Regulation

It is responsible for developing

the criteria for all market

participants; ensuring compliance

with registration requirements;

and monitoring compliance with

the SRC.

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Corporation Finance Department

(CFD)

This department is responsible

for registering securities prior to

offer or sale to the public;

ensuring that adequate

information is available about

said securities to investors; and,

monitoring compliance by issuers

with the SRC.

Non- Traditional Securities and

Instruments Department (NTD)

NTD is responsible for the

registration and licensing of non-

traditional securities and

instruments including but not

limited to pre-need plans,

commodity futures contracts,

proprietary or non-proprietary

membership certificates and

other similar instruments; and

monitoring of compliance of

entities engaged therein, with

related laws, rules and

regulations.

COMPANY REGISTRATION

Company Registration and

Monitoring Department (CRMD)

The CRMD is responsible for the

registration of domestic

corporations and partnerships

under the Corporation Code and

related laws, foreign entities

doing business in the Philippines

under the Foreign Investments

Act of 1991 and multinational

companies establishing regional

headquarters and regional

operating headquarters in the

Philippines under the Book III of

the Omnibus Investments Code

of 1987; and, monitoring

compliance with the aforesaid

laws.

ENFORCEMENT

Compliance and Enforcement

Department (CED)

It is responsible for ensuring the

compliance of all market

participants, issuers and

individuals with Philippine

regulations and governing

legislation; and, taking

appropriate action against all

violators of the Code and other

relevant laws, rules and

regulations implemented by the

Commission.

SUPPORT SERVICES

Financial Management

Department (FMD)

It provides services for budget,

fiscal, accounting and treasury

functions.

Human Resources and

Administrative Department

(HRAD)

HRAD oversees all human

resource and administrative

support functions for the SEC and

activities related to employment

policies and practices ensure SEC

compliance with all Philippine

labor laws; and, interact with the

related government agencies as

necessary in establishing policies

and practices and addressing

employee grievances.

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Economic Research and

Information Department (ERID)

It serves as technical lead for the

Commission in software

development, hardware

acquisition and utilization,

maintenance of communications

network; handles public affairs,

investment research, investor

education and public assistance;

provides corporate planning and

monitoring services; and,

coordination of development

assistance.

The Special Offices

Office of the General Counsel

(OGC)

Office of the General Counsel

(OGC) provides expert legal

advice to the Commission; assists

in the preparation of the

Commission’s legislative agenda;

acts as the Commission’s liaison

with the Congress; and, ensures

that rulings and opinions of the

Commission are consistent with

Philippine laws and

jurisprudence.

Office of the General Accountant

(OGA)

It acts primarily as an expert

resource to the Commission in

the area of promoting the

adoption of international

accounting standards to enhance

the transparency of the

Philippine capital market.

The Extension Offices

The SEC has seven extension

offices in the cities of Baguio,

Legaspi, Iloilo, Cebu, Cagayan de

Oro, Davao and Zamboanga.

The extension offices facilitate

the requirements of the investing

public from these cities and

surrounding areas.

Reportorial Requirements

1. What laws govern the

submission of reports to the SEC?

a. Securities Regulation Code

(R.A. 8799/SRC)

b. Corporation Code of the

Philippines

c. Investment Houses Law (P.D.

129)

2. Who should file reports with

the SEC?

2.1 Registered stock corporations

(including foreign corporations

e.g. branch offices,

representative offices, regional

headquarters or regional

operating headquarters)

2.2 Registered non-stock

corporations (foundations,

associations, non-government

organizations, corporation sole,

etc.)

2.3 Corporation granted

secondary licenses e.g. broker or

dealer in securities eligible dealer

(GSED),

2.4 Investment adviser of an

investment company,

2.5 Close-end or open-end

investment company,

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2.6 Investment house,

2.7 Transfer agent,

2.8 Commodity or financial

futures exchange/broker

merchant,

2.9 Financing company,

2.10 Pre-need plan issuer,

2.11 General agent in pre-need

plans; and

2.12 Time shares/club shares/

membership certificates issuers

or selling agents thereof.

3. What reports should registered

corporations file with the SEC?

See Table 1. Report for all SEC

Registered Corporations

with primary license.

4. What are the specifications of

the GIS, AFS, General and Special

FS reports?

The GIS, AFS, General and Special

FS reports should be printed on

an A4-sized bond paper under a

standard cover page or sheet.

The original and all conformed

pages should use only one side of

the paper.

5. Where can one obtain blank

GIS, General and Special FS

forms?

Both hard and soft copies of

blank GIS, General and Special FS

forms are available at the Main

and extension offices of the SEC.

The forms and revisions thereof

may also be downloaded from

the SEC web site.

6. Where can one obtain blank

SEC forms for reports required of

corporations with secondary

licenses?

See Table 2. Sources of Forms

General Information Sheet

The General Information Sheet

(GIS) should be certified and

sworn to by the corporate

secretary.

In case when annual meeting

is postponed

The corporation should submit a

NOTICE OF POSTPONEMENT

within ten calendar days before

the date of the meeting, as

specified in the by-laws.

If no annual meeting was held

The corporation should submit

the GIS with the AFFIDAVIT OF

NON-HOLDING OF ANNUAL

MEETING within 30 calendar days

from the date of the annual

meeting, as specified in the by-

laws.

If the corporation is not in

operation

It should submit an AFFIDAVIT

OF NON-OPERATION within 120

days after the end of the fiscal

year, as specified in the by-laws.

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Requirements of SEC on

Financial Statement

1. The FS of the following

domestic corporations shall be

audited by CPA registered with

the Board of Accountancy:

1.1 Stock corporations with paid

up capital of Php50,000 or more;

1.2 Non-stock corporations with

annual gross receipts of

Php100,000 or more, or total

assets of Php500,000 or more.

2. The FS of the following

domestic corporations shall, at

the minimum, be certified under

the oath by the treasurer of the

corporations:

2.1 Stock corporations with paid

up capital of less than Php50,000;

and

2.2 Non-stock corporations with

annual gross receipts of less than

Php100,000 or total assets of less

than Php500,000.

3. The FS of the following foreign

corporations shall be audited by

an independent CPA registered

with the Board of Accountancy.

3.1 Branch office of a stock

foreign corporation with assigned

capital of Php50,000 or more;

3.2 Branch office of a non-stock

foreign corporation with total

assets of Php500,000 or more;

3.3 Representative office of a

foreign corporation with total

assets of Php500,000 or more;

3.4 Regional Operating

Headquarters of Multinational

Companies with assigned capital

of Php500,000 or more

3.5 Regional Headquarters of

Multinational companies with

total assets of Php500,000 or

more.

Required Entities to use

Electronic copy/Diskette of

GIS and AFS

It requires corporation with Gross

Sales/Revenue of at least

Php5,000,000 to submit a

diskette or compact disk

containing the electronic file/soft

copy of the GIS or the GFFS(

General Form for Financial

Statements) and industry-specific

SFFS (Special forms for Financial

Statement).

The GIS diskettes shall be

accompanied by a Certification

under oath by the Corporate

Secretary, president or CEO

It shall be submitted within 30

calendar days from the holding of

annual meeting.

SEC’s fees and charges

The Securities and Exchange

Commission provides information

about the fees and charges for

the Company Registration and

Monitoring Department,

Economic Research and

Information Department, Human

Resource and Administrative

Department and Office of the

General Accountant.

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TABLE 1: REPORT FOR ALL SEC REGISTERED CORPORATIONS WITH PRIMARY LICENSE

TABLE 1: REPORT FOR ALL SEC REGISTERED CORPORATIONS

WITH PRIMARY LICENSE

Document No. of copies Filer Filing Period

General

Information

Sheet (GIS)

4

Domestic Stock/Non-stock

Corporations

Within 30 days from date of the

annual stockholders’ or members

meeting

Branch Office &

Representative

Office of Foreign

Corporations

Within 30 days from the

anniversary date of the issuance

of the license

Regional Operating

Headquarters

(ROHQs)

Regional Headquarters

(RHQs) of Multinational

Companies

Within 30 calendar days after the

issuance of the certificate of

registration and license, and then

annually, within 30 calendar days

after the anniversary date

of the issuance of the certificate

of registration and license

Audited Financial

Statements (AFS)

Stamped

“RECEIVED”

by the BIR

4

Domestic Stock/Non-stock

Corporations

Within 120 calendar days after

the end of the fiscal year, as

indicated in the Financial

Statements

Branch Office &

Representative

Office of Foreign

Corporations

Regional Operating

Headquarters

(ROHQs)

Regional Headquarters

(RHQs) of Multinational

Companies

TABLE%201.docx

TABLE%201.docx

TABLE%201.docx

TABLE%201.docx

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TABLE 2: SOURCES OF FORMS

FILER DEPARTMENT

Brokers/Dealers, Salesmen and Associated Persons,

Investment Co.

Advisers, Investment Adviser, Sales Agent, Transfer

Agents, Investment

House/Underwriter of Securities, Self-Regulatory

Organizations (e.g.

Exchanges, etc)

Market Regulation Department

(MRD

Listed and Registered Securities Issuers, Exempt Issuers,

Corporations with Quasi-Banking License, Investment or

Mutual Fund Companies, Financing

Companies

Corporation Finance Department

(CFD

Pre-Need Plan Issuers, Dealers, Branches, Salesmen,

General Agent in Pre-need Plans, Commodity or Financial

Futures Exchange/Broker Merchant

Non-Traditional Securities and

Instruments

Department (NTD)

DISCLAIMER:

This article is prepared for the general information of clients and other interested persons. It is

provided more for convenience and should not be construed as a substitute for legal advice. It should

not be acted upon in any specific situation without appropriate legal advice and it may include

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information, content, presentation or accuracy, or make any warranty, express or implied, regarding

the opinion of the author in the article other than the cited laws, regulations and court decision. This

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TAX ALERTS - dmdcpa.com.ph ALERTS visit us on ... amended by RA 7798) Education Act is enacted to establish and maintain a complete, adequate and