The Securities and Exchange Commission (SEC) is making it easier for corporations to comply with their reportorial requirements by integrating certain reportorial requirements with the registration process and providing for the automatic enrollment of newly registered corporations in the Commission’s online submission portal.
The Commission on December 18 issued SEC Memorandum Circular No. 23, Series of 2023, which provides for the Integration of newly registered corporations’ compliance with SEC Memorandum Circular No. 28, Series of 2020 (MC 28)and SEC Memorandum Circular No. 1, Series of 2021(MC 1) with the SEC Electronic Simplified Processing of Application for Registration of Company (eSPARC) and the SEC Electronic Filing and Submission Tool (eFAST).
MC 28 requires every corporation, association, partnership, and person under the Commission’s jurisdiction and supervision to create and designate an official email address and cellphone number.
Meanwhile, MC 1, which provides the Guidelines in Preventing the Misuse of Corporations for Illicit Activities through Measures Designed to Promote Transparency of Beneficial Ownership, requires incorporators to disclose with the SEC the person/s on whose behalf the registration of the corporation was applied for.
Nominee incorporators or applications for registration, as well as the nominee directors or trustees and nominee shareholders of the corporation, must likewise disclose to the Commission their respective nominators or principals.
The submission of such information forms part of the Commission’s efforts to guard against the misuse of the corporate vehicle against money laundering and terrorist financing activities by having access to adequate, accurate, and timely information on beneficial ownership and control of corporations.
“Corporations’ reportorial and other regulatory requirements provide vital information and insights to policymakers, regulators, law enforcers, businesses, investors and other stakeholders,” SEC Chairperson Emilio B. Aquino said.
“In this light, we are making it easier for corporations to comply with these requirements, as well as for stakeholders to access and use them to inform their decisions and actions,” he added.
MC 28 and MC 1 compliance during registration
Starting December 18, new corporations will no longer have to submit separate reports for their official and alternate email addresses and mobile phone numbers required under MC 28, as well as information on their beneficial owners pursuant to MC 1. They shall be required to provide such information during the registration process either through eSPARC or through its subsystem, One-Day Submission and E-registration of Companies (OneSEC).
Previously, new corporations were mandated to comply with MC 28 by submitting the applicable form through the online MC 28 Submission Portal within 30 days upon receipt of their certificate of registration, license or authority. They also had to comply with MC 1 separately within 30 days upon receipt of their incorporation papers.
Those with pending applications prior to the effectivity of MC 23 may opt to revert their pending applications and resubmit them with their MC 28 and MC 1 compliance.
Automatic enrollment in eFAST
In addition, new corporations shall now be automatically enrolled in eFAST, the Commission’s online system for submission of reportorial requirements.
New corporations shall be given temporary login credentials for their eFAST company accounts through the email addresses they have provided during the registration process. Following the launch of eFAST in 2021, all registered corporations have been required to submit their annual reportorial requirements such as the General Information Sheet and annual financial statements using eFAST.
Corporations previously had to undergo a separate enrollment process for their company accounts and authorized filer accounts before they could submit their reports using eFAST.
The SEC has continuously improved its processes to ensure the ease of forming a corporation and complying with regulatory requirements.
In 2021, the Commission launched eSPARC, allowing new businesses to complete their registration process in three days, down from 34 days consisting
of 16 steps previously. The process could be even faster through OneSEC, where one applicant has posted a record of one minute and 14 seconds from the start of application to the receipt of a digital Certificate of Incorporation.
In the same year, the Commission launched eFAST to allow corporations to submit their reports completely online. With eFAST, corporations no longer have to submit hard copies of their reports to the SEC.
With these improvements, eSPARC has recently been hailed as one of the best company registration systems in the world by the Corporate Registers Forum, a global organization of corporate registries, in a conference held in Malta in October.
Mr. Aquino was also recognized as the first Public Sector Innovator in the 2023 Mansmith Innovation Awards by research consultancy Mansmith and Fielders, Inc., and as CEO of the Year in the Future Enterprise Awards 2022 Philippines by IDC Philippines, among others, for the digital transformation of the Commission’s services.
