Jan 142015

FOREIGN CORPORATIONS operating through a license to do business in the Philippines are covered by the provisions of the Corporation Code. In this respect, similar to domestic corporations, they are regulated by the Securities and Exchange Commission (SEC). Among the obligations of a foreign corporation is the duty to notify the SEC of relevant changes on a timely basis, such as changes in principal office address, accounting period, current set of officers, among others.

Apr 192014
SEC reminds companies on financial reporting

MANILA, Philippines – The country’s corporate watchdog has reminded companies to comply with the strict rules on financial reporting obligations. In a public notice, the Securities and Exchange Commission (SEC) said the board of directors and management of registered corporations are required to strictly observe their responsibilities over the preparation and submission of their annual financial statements. “The Commission firmly believes that it has set sufficient regulations and has actively conducted administrative actions towards a change in the old culture in financial reporting that incorrectly allowed external auditors to prepare and review the financial statements at the same time,” said SEC chairperson Teresita J. Herbosa. Corporations and external auditors must strictly observe their respective responsibilities over financial statements, Herbosa said, adding that appropriate penalties will be imposed on erring entities. Listed firms are required to submit quarterly and annual financial reports to the SEC and the Philippine Stock Exchange. Under the Securities Regulation Code, companies’ financial statements are primarily the responsibility of their respective management. Business ( Article MRec ), pagematch: 1, sectionmatch: 1 “The board of directors reviews and approves the financial statements before these are submitted to the stockholders,” SEC said. SEC said that during the independent examination of the financial statements, the management should provide the external auditor with the complete set of financial statements. “In order to have an independent review of the financial statements prepared by the management, the external auditor must not create a template format of financial statements for mere accomplishment by the Read More …

Mar 162014
SEC issues new accreditation rules for credit rating agencies

MANILA, Philippines – Credit rating agencies (CRAs), hired to assess the creditworthiness of companies and debt issuances, will be subject to stringent accreditation and operational requirements. In a memorandum, the Securities and Exchange Commission (SEC) said it came up with guidelines on the accreditation, operations and Reporting of CRAs “to increase transparency and improve the integrity of credit ratings.” CRAs are tapped by corporations that plan to offer of issue commercial papers of debt securities like bonds. Such firms perform credit evaluation of corporations and business projects or of debt issues, assessing the overall creditworthiness of the borrower as a guidance to the investing public. Under the guidelines, SEC said a CRA should be a stock corporation with a paid-up capital of at least P10 million, which will increase to P15 million after the third year to cover operational improvements. CRAs should be composed of qualified and independent officers and personnel to conduct rating activities. Business ( Article MRec ), pagematch: 1, sectionmatch: 1 For the application for annual accreditation, CRAs are required to submit a list of shareholders and corporate affiliation, other business activities, a written code of conduct, rating scale and criteria, operating procedures, and copy of written agreement with issuers. Prior to rating the creditworthiness of an issuer or debt security, the CRA should sign a contract to render assessment services. Local debt watchers include Philippine Rating Services Corp. and Credit Rating and Investors Services Philippines Inc. The top three global credit raters are Fitch Ratings, Standard Read More …

Mar 152014
SEC warns public anew on investment scams

MANILA, Philippines – The country’s corporate watchdog has warned the public anew against conducting business with numerous firms not permitted to sell investment instruments. In a public notice, the Securities and Exchange Commission (SEC) reminded investors about the banned sale of shares in a Boracay-based property developer. The SEC said the public should take note that the Court of Appeals in 2010 affirmed a cease and desist order that prevented Crown Regency Holiday International Inc., Fuente Triangle Realty Development Corp., Megatrend Realty Network Inc. and Boracay Multiple Properties Developers Inc. from selling investment contracts and preferred shares of Boracay Multiple Properties Developers Inc. The agency said the companies have yet to comply with the requisite registration statement for the securities. “The aforementioned decision was upheld by the Third Division of the Supreme Court in its resolution dated Aug. 15, 2012,” SEC said, adding that the ban was final and executory. The corporate regulator also issued a warning against Xingasia Marketing Corp., which is offering investment opportunities like “corperate bond notes” through subsidiaries Xingasia Lending & Investors Corp. and Xingasia Invest & Trust Bank Corp. Business ( Article MRec ), pagematch: 1, sectionmatch: 1 “Xingasia Marketing is not, under any circumstance, authorized or licensed to engage in activities and/or solicit investments,” the SEC said. SEC documents showed that Xingasia Marketing is not a registered issuer of securities. It is also not licensed to act as securities broker, investment adviser, investment house and transfer agent. “It has not filed nor has it Read More …

Feb 252014
LRWC defers preferred shares offer

MANILA, Philippines – Listed gaming concern Leisure & Resorts World Corp. (LRWC) has deferred a planned sale of preferred shares. In a disclosure to the Philippine Stock Exchange, LRWC sad its board decided to postpone its planned share sale “due to a change in the timing in the implementation of its work program and to further review its current expansion program to align with its over-all business strategy in the medium-term.” “As a result, the company will revisit its financing program,” LRWC said. The offer period was supposed to run from March 13 to 21 while the listing date was set on March 31. The deferment came after the Securities and Exchange Commission approved last week the public offering of P250 million worth of perpetual preferred shares with 12.5 million detachable warrants. The preferred shares are cumulative, non-voting and non-participating and were supposed to carry a coupon rate of 8.5 percent per annum and are paid semi-annually. Business ( Article MRec ), pagematch: 1, sectionmatch: 1 Under the terms of the offering, investors are entitled to one warrant for every 20 preferred shares they own.  The warrants are convertible to common shares starting on the fifth year or from March 31, 2019 to March 31, 2022. Each warrant, if exercised at a price of P15 or the average weighted trading price for the three months prior (whichever is lower), will be converted to one common share. LRWC aimed to raise about P437.5 million from the offering upon full payment of Read More …

Dec 092013
SEC issues new rules on corporate names

MANILA, Philippines – The Securities and Exchange Commission (SEC) is rationalizing the guidelines on the use of corporate and partnership names. The new rules simplify the identification of a company based on the nature of its business, avoiding confusion for the investing public, the corporate regulator said. In a memorandum, SEC said it came up with the Omnibus Guidelines and Procedures on the Use of Corporate and Partnership Names “to keep abreast with developments in business and information technology in the country.” “The SEC shall, for the protection of the public interest and other justifiable causes, disallow the use of names that, in its judgment, are misleading, deceptive, confusingly similar to a registered name, or contrary to public morals, good customs or public policy,” the agency said. The corporate regulator said corporate names should contain “Corp.” or “Inc.” but partnerships are required to bear “Co.” or “Ltd.” A professional partnership name may include “Co.,” “Associates” or “Partners.” “A term that describes the business of a corporation in its name should refer to its primary purpose,” SEC said. Business ( Article MRec ), pagematch: 1, sectionmatch: 1 “The name shall not be identical, misleading or confusingly similar to a corporate or partnership name registered with the SEC, or with the Department of Trade and Industry, in the case of sole proprietorships,” it added. The corporate watchdog also prevented companies from using punctuation marks, spaces, signs and symbols to differentiate a proposed name from a registered entity. “The name of an internationally Read More …

Dec 032013
SEC rationalizing penalties for corporate violations

MANILA, Philippines – The Securities and Exchange Commission (SEC) is rationalizing its guidelines in penalizing companies that violate licensing, reportorial and regulatory requirements. Stiffer penalties and sanctions are seen to dissuade firms from committing violations while beefing up the agency’s funds to upgrade its manpower and monitoring systems, the SEC said. In a public notice, SEC said it formulated the Consolidated Scale of Fines and Penalties now open for public comment. “The clarity of obligations and understandability of the consequences of violations is attained when the fines and penalties are updated and contained in one issuance,” the SEC said. Hence, the corporate regulator said it is ideal for it to adopt a consolidated scale of fines covering the sanctions for violations of the various laws and rules. Specifically, the proposed rules took into consideration the guidelines that took into effect since 2002 like the rules for non-compliance on reportorial requirements, revised guidelines on foundations and scale of penalties for lending companies. Business ( Article MRec ), pagematch: 1, sectionmatch: 1 Under the revised scale, violations will be presented according to three dimensions: licensing that focuses on market activities without prior registration; reportorial that highlights non-submission or late filing of records; and operational, prudential and other requirements that take on failure to perform a prescribed activities or adopt a mandated principle, standard or procedure. The SEC has posted a steady increase in its collection of fines and penalties, hitting P213.73 million last year from P199.02 million in 2011, P148.96 million in Read More …

Nov 232013
SEC plans hike in transaction fees

MANILA, Philippines – The Securities and Exchange Commission plans to substantially hike its transaction fees and charges. The proposed new rates are in line with higher costs and capacity building measures in the pipeline, the corporate regulator said in a public notice. “The primary purpose for increasing the fees and charges is better public services delivery,” the SEC said. “In general, the increase in the registration fees and annual fees is being proposed in view of the increasing cost of registration, supervision and monitoring of SEC-registered entities,” the agency said. The SEC said other factors it took into consideration include the inflation rate since current rates were implemented in 2004, higher cost of hiring and retaining qualified personnel, and increased cost of improving and maintaining the SEC’s systems to properly supervise and monitor licensees. Higher rates will also support the “increase in complexity of work assignments, oversight of new products and new markets, investment in capacity building measures, and overhead expense,” it added. Business ( Article MRec ), pagematch: 1, sectionmatch: 1 Domestic corporations, foreign companies and multinationals, financing and lending companies, stock market brokers and dealers, investment houses and transfer agents, and self-regulatory organizations and central depositories will have to bear the increase in rates. Transaction fees and charges might spike to as much as 100 percent. For instance, the revision fee for amended articles of partnership will double to P2,000 from P1,000 and charge for the amendment in by-laws to P1,000 from P500. For foreign multinationals, petitions for Read More …

Nov 082013
SEC oks AEVs P10-B bonds

MANILA, Philippines – Aboitiz Equity Ventures Inc., the listed holding firm of the Cebu-based Aboitiz clan, secured the Securities and Exchange Commission’s nod to issue up to P10 billion worth of retail bonds. The approval, however, is contingent on AEV’s compliance of certain conditions which include the submission of certain documents to the SEC, the company said in a disclosure to the Philippine Stock Exchange. The 10-year bonds earlier received the highest credit rating of  “PRS Aaa” from the Philippine Rating Services Corp. Obligations rated PRS Aaa are of the highest quality with minimal credit risk. It means the issuer’s capacity to meet its financial obligations is extremely strong. PhilRatings said the credit score reflects AEV’s sustained and strong operating performance, sound capital structure with a conservative leverage position and positive growth prospects. AEV’s main core investments are  in power distribution and generation (Aboitiz Power), banking (Union Bank of the Philippines), food manufacturing (Pilmico Foods) and property development (Aboitiz Land). Business ( Article MRec ), pagematch: 1, sectionmatch: 1 It is also diversifying into infrastructure, particularly on water distribution and airport development.  The conglomerate in partnership with  Ayala Corp. is vying for the Mactan-Cebu International Airport. Aboitiz Power, is a leading power generation and distribution company in the county with a total attributable capacity of 2,232 megawatts.

Jul 162013
ALI to issue P21-B bonds

MANILA, Philippines – Property giant Ayala Land Inc. (ALI) has secured the approval of the Securities and Exchange Commission (SEC) to issue as much as P21 billion worth of bonds. This development will allow the property arm of the Ayala conglomerate to conduct its largest fundraising in the capital market. In a disclosure, ALI said it has received SEC approval to sell up to P21 billion in bonds. “The company will issue the initial tranche of the bonds as soon as all other necessary documents are submitted and all the required approvals are secured, which hopefully will be completed before the end of the month,” ALI said. Last week, ALI chief finance officer Jaime Ysmael said the fundraising will “partly finance our capital expenditures program for the year.” In June, ALI’s board of directors approved the sale of up to P21 billion in long-term, fixed-rate corporate bonds through a general public offering. It will be the largest fundraising of ALI thus far, eclipsing the P15 billion it secured from a retail bond offering in April last year. Business ( Article MRec ), pagematch: 1, sectionmatch: 1 Philippine companies have been tapping funds from different channels like bonds and banks amid low interest rates and high liquidity. The property firm allotted P65.5 billion in capital expenditures this year as it plans to launch 69 new projects worth P129 billion to ensure continuous growth in the coming years. It launched 67 new projects last year worth P110 billion. In the first quarter, Read More …