The Securities and Exchange Commission has suspended the imposition of monthly penalties for the late or non-filing of reportorial requirements until December 31, 2026, in a move aimed at reducing transaction costs and promoting ease of doing business.
During its meeting on May 5, the Commission En Banc approved the suspension of penalties imposed for every month of delay in the filing of reportorial requirements under SEC Memorandum Circular No. 6, Series of 2024.
The memorandum circular outlines the schedule of fines and penalties for the late or non-filing of annual financial statements (AFS) and general information sheets (GIS) by corporations registered with the SEC.
Under the policy, one-person corporations and domestic stock or non-stock corporations with retained earnings, fund balance, or equity are charged an additional P1,000 for every month of continuing violation on top of the base penalty for late or non-filing of GIS or AFS.
Corporations with negative retained earnings, meanwhile, incur an additional P500 monthly penalty for delayed submissions.
The suspension covers only the monthly compounding penalties, which accumulate for every month a filing remains overdue, up to a maximum of 12 months. Base fines for late or non-filing of reports will still be imposed based on the existing schedule.
Francis Lim said the move reflects the SEC’s commitment to creating a more responsive business environment.
“As we celebrate the Ease of Doing Business month this May, the SEC reaffirms its commitment to foster a robust and responsive business environment,” Lim said.
“By suspending the compounding monthly penalties, we are providing corporations an opportunity to get back their good standing without the burden of mounting transaction costs, as part of our goal of pushing corporations toward full compliance and sustainable growth,” he added.
The suspension will apply to corporations with pending monitoring applications. Companies that have already received final assessments but have yet to settle payments will be issued updated assessments excluding the monthly delay penalties.
