SEC Memorandum Circular No. 8, 28 June 2016

SEC Memorandum Circular No. 8 amended further ICA Rule 35-1(d)(4), as amended by SEC Memorandum Circular No. 12, series of 2013, providing exemption from the 5% liquidity requirement of mutual fund index trackers:

                “ICA Rule 35-1(d)(4)

For liquidity purposes, unless otherwise prescribed by the Commission, at least five percent (5%) of an open-end company fund shall be invested in liquid/semi-liquid assets such as: (A) Treasury notes or bills, Certificates of Indebtedness issued by the Bangko Sentral ng Pilipinas which are short term, and other government securities or bonds and such other evidence of indebtedness or obligations, the servicing and repayment of which are fully guaranteed by the Republic of the Philippines; (B) Savings or time deposits with government-owned banks or commercial banks, provided that in no case shall any such savings or time deposit accounts be accepted or allowed under a ‘bearer’, ‘numbered’ account or other similar arrangement. Provided that, the open-end company fund shall submit a liquidity contingency plan to the Commission before it implements a decreased investment of less than ten percent (10%) in liquid/semi-liquid assets.

A Mutual Fund Index Tracker may be exempted from complying with the 5% liquidity requirement provided that it submits a notarized contingency plan signed by the President of the Fund and its Fund Manager. The plan must include a statement that:

‘In making any redemption to meet a client obligation, the fund manager will exercise the requisite prudence and diligence necessary under the circumstances and taking into account all relevant factors that will ensure market stability.’

SEC Memorandum Circular No. 9, 18 July 2016

Rule of the 2015 Implementing Rules and Regulations of the Securities Regulation Code (“2015 SRC IRR”) requires every Broker Dealer to notify in writing the Self-Regulatory Organization (“SRO”) and the SEC of any written complaints received from the client and the actions taken by the Broker Dealer with respect thereto every fifteenth (15th) day of the month. SEC Memorandum Circular No. 9 was issued to implement Rule and provides the following:

1.       The Monthly Complaint Report (“MCR”) provided in Rule shall be signed by the Associated Person/Compliance Officer and duly noted by the President;

2.       All complaints received during a particular month shall be reported using the MCR and duplicate copies of the complaint shall be attached to the MCR:

a.       The MCR shall be submitted no later than the fifteenth (15th) day of the following month; and

b.      Unresolved complaints, as of the end of the month, shall be included, regardless of the date the complaint was received;

3.       Contents of the MCR:

a.       Date of complaint or date the Broker Dealer received the complaint;

b.      Name of complainant;

c.       Description of the complaint;

d.      Action taken by the Broker Dealer; and

e.      Status of the complaint, whether still pending or already resolved;

4.       The Broker dealer shall still submit a MCR even if it did not receive a complaint for a particular month; and

5.       Failure to comply with SEC Memorandum Circular No. 9 shall be deemed a violation of Rule 52.1 of the 2015 SRC IRR and subject to the corresponding applicable penalty under the law, and rules and regulations issued by the SEC.

SEC Memorandum Circular No. 10, 28 July 2016

Guidelines on the issuance of certifications regarding the nationality of non-stock corporations:

1.       A non-stock corporation registered with the SEC is Philippine National if:

a.       All its members are citizens of the Philippines; or

b.      At least sixty percent (60%) of its members entitled to vote are citizens of the Philippines; or

c.       At least sixty percent (60%) of its members’ total number of votes as broadened in the By-Laws are held by citizens of the Philippines; or

d.      All members of a foreign non-stock corporation licensed to do business by the SEC are citizens of the Philippines;

2.       The certification shall be requested from the Company Registration and Monitoring Department of the SEC;

3.       The requirements for the issuance of a certification are:

a.       Payment of fee of PhP5,000.00;

b.      Membership Book duly registered with the SEC;

c.       Sworn certified list of members indicating their nationalities issued by the Corporate Secretary; and

d.      Sworn certification regarding the voting power of members issued by the Corporate Secretary.

BIR Revenue Memorandum Circular No. 86-2016/DOF-DTI Joint Administrative Order No. 01, 02 August 2016

Promulgates the Implementing Rules and Regulations (“IRR”) of Republic Act No. 10708, otherwise known as the “Tax Incentives Management and Transparency Act.” Registered Business Entities availing of incentives administered by an Investment Promotion Agency (such as BOI, PEZA, etc.) (“IPA”) are mandated to:

1.       File returns and pay taxes on or before the deadlines set under the NIRC, using the BIR eFPS; and

2.       File with their respective IPA an Annual Tax Incentive Report within 30 days from the statutory deadline for filing of the Final Adjusted Return for Income Tax.


1st violation         Fine of Php100,000.00

2nd violation        Fine of Php500,000.00

3rd violation        Cancellation of registration

SEC Memorandum Circular No. 11, 05 August 2016

SEC Memorandum Circular No. 11 amended Item No. 2 of SEC Memorandum Circular No. 06, series of 2012, regarding the registration of certain activities consistent with Republic Act No. 9485 or the “Anti-Red Tape Act of 2007”. SEC Memorandum Circular No. 11 amended Item 2 SEC Memorandum Circular No. 06 as follows:

“TO :       All Concerned

Consistent with the objectives of Republic Act 9485 (otherwise known as the Anti Red Tape Act of 2007), the Commission, in its en banc meetings on July 12 and July 27, 2012, resolved to dispense with the following requirements in the registration activities set forth below:    


2. SPECIAL AUDIT REPORT - for applications to increase the authorized capital stock of corporations where the subscription to the increase is paid in case except (a) listed companies, (b) public companies defined in the Securities Regulation Code, (c) companies that offer or sell securities to the public, (d) where the payment to the subscription to the increase is more than Fifty Million Pesos (P50,000,000.00):

        In lieu of such report, a notarized Subscription Contract among the stockholder/s, treasurer and president for the corporation stating the number of additional shares subscribed to and paid for shall be submitted by the corporation.



SEC Memorandum Circular No. 13, 18 August 2016

Guidelines on the issuance of Certification of Paid-up Capital:

1.       A certification of paid-up capital shall be issued upon request to be filed at the Company Registration and Monitoring Department (“CRMD”) and Extension Offices (“EOs") of the SEC;

2.       A certification of paid-up capital may be based on the following:

a.       Audited Financial Statements (“AFS”) as of the last fiscal year stamped received by the Bureau of Internal Revenue (“BIR”) and the SEC; or

b.      Audited Interim Financial Statements duly received by the SEC; or

c.       Articles of Incorporation with reference to the paid-up capital in the Treasurer’s Affidavit and as certified by the Treasurer-in-Trust; or

d.      Latest Approved Certificate of Filing of Increase of Capital Stock, supported by a report of the Financial Analysis and Audit Division (“FAAD”) or Corporate and Partnership Registration Division (“CPRD”) of CRMD or by EOs.

3.       The corporation shall submit the following:

a.       Duly accomplished request form stating the basis of certification is accordance with Item no. 2;

b.      Audited Financial Statements as of the last fiscal year stamped received by BIR and SEC or Audited Interim Financial Statements duly received by the SEC, in case there is/are payments to unpaid subscription(s) after the issuance of the AFS as of last fiscal year;

c.       Notarized Secretary’s Certificate on No Pending Intra-Corporate Dispute; and

d.      Monitoring Clearance.

4.       The filing fee in the amount of Php1,000.00 shall be paid for the issuance of the Certification.

Note: This material has been prepared for informational purposes only and should not be considered as legal advice.