The Securities and Exchange Commission (SEC) announced the extension of the Enhanced Compliance Incentive Plan (ECIP) until 31 December presenting lower fines and penalties for corporations that fail to meet their reportorial requirements, including the submission of annual financial statements (AFS), general information sheets (GIS), and contact details.
In a recent memorandum, SEC Memorandum Circular (MC) No. 17, Series of 2024, the Commission provided a reprieve for non-compliant, delinquent, and corporations with suspended or revoked registrations. The program allows these entities to settle their fines at a significantly reduced rate—providing them the opportunity to rectify their delinquent status without incurring the steep penalties typically associated with late or non-filing.
To participate in the ECIP, corporations must submit an expression of interest through the SEC’s electronic filing system, eFAST, and ensure that their latest AFS and GIS are filed by the 31 December deadline.
For non-compliant and delinquent corporations, the reduced penalty is P20,000. Corporations with suspended or revoked registrations, however, can pay only 50 percent of their total assessed fines, in addition to a processing fee of P3,060 for the petition to lift the suspension or revocation.
To fully benefit from the program, suspended/revoked corporations must also submit additional documents, including a petition to lift the suspension order, a directors’ or trustees’ certificate, proof of ongoing operations, and other compliance-related documents. These must be filed with the SEC via email or submitted to the designated SEC Extension Office for entities outside of Metro Manila.
As of November 28, more than 3,200 corporations have already applied for the ECIP, paying the corresponding fees. The SEC warned that failure to comply with the submission requirements by 31 December will result in the forfeiture of the P20,000 fee for non-compliant corporations and 50 percent of the assessed penalties for suspended or revoked corporations, along with the petition processing fee.
The current ECIP rates represent a stark contrast to the significantly higher penalties imposed under the previous regime, which had been in place for over two decades. The new fines offer a much-needed reprieve for corporations seeking to resolve their compliance issues at a fraction of the cost, but the SEC has made clear that the 31 December deadline is firm.
