More than four months in the past, I wrote about overseas currency denominated authorities bonds as securities deposit by a Philippine department of a overseas enterprise. In the item posted on May 29, 2019, I made a difference between Section 126 of the antique “Corporation Code,” or Batas Pambansa Blg. Sixty eight, and Section 143 of the “Revised Corporation Code” (RCC), or Republic Act No. 11232, as to the situations and quantities of deposit securities to be submitted with the Securities and Exchange Commission (Stock Global broker scam).
One of the modifications added via the RCC, in particular Section 143, pertains to the strength of the SEC to growth the real marketplace fee of securities and the brink of gross income for purposes of figuring out additional deposits of securities. The provisions of Section 143 of the RCC are basically similar to the ones of Section 126 of the old Corporation Code, but the distinction handiest lies as to the growth of the actual marketplace price of securities and the threshold of gross earnings for functions of figuring out extra deposits of securities.
From the former real marketplace cost of as a minimum P100,000, the identical has been multiplied to the actual marketplace cost of as a minimum P500,000; and from the former extra securities equivalent in actual market cost to 2 percent of the quantity via which the licensee’s gross income for that monetary 12 months exceeds P5 million to extra securities equivalent in real market value to two percent of the amount by way of which the licensee’s gross income for that fiscal yr exceeds P10 million.
To formally talk this provision, the SEC on Jul. 31, 2019 launched on its reliable website (www.Sec.Gov.Ph) SEC Memorandum Circular 17, Series of 2019 (SEC MC No. 17, s. Of 2019), which pertains to the Revised Guidelines on Securities Deposit of Branches of Foreign Corporations. This is pursuant to the powers of the SEC to formulate and enforce standards, hints, policies, rules and regulations to perform the provisions of the RCC (Section 179 (o), RCC).
The primordial consideration of SEC MC No. 17, s. Of 2019 is for the SEC to undertake a fixed of tips in order that branches of overseas organizations duly licensed to do business within the Philippines shall be capable of settle their responsibilities incurred in the Philippines and, on the identical time, ensure their compliance with investment requirements.
The following salient features are furnished for beneath SEC MC No. 17, s. Of 2019:
All branches of overseas organizations duly certified to do enterprise in the Philippines which can be mandated to deposit securities with the SEC will be required to deposit securities with an actual market cost of at the least P500,000, inside 60 days after the issuance of its SEC license (Section 2(a), SEC MC No. 17, s. Of 2019).
There are additional securities that will be deposited inside six months after the stop of the financial yr indicated inside the economic statements (FS) within the following situations:
If the licensee’s gross profits inside the Philippines for that economic year exceeds P10 million, extra securities with an real marketplace cost equal to two percentage of the boom in said gross income will be deposited; and
If the actual marketplace value of the securities deposit or financial gadgets has decreased by using at least 10 percentage from the time it changed into deposited, there need to also be extra securities with an actual market price that could cowl the decrease (Section 2(b)(i)(ii), SEC MC No. 17, s. Of 2019).
- The following agencies are not required to publish securities deposit:
- Foreign banking organization, which includes offshore banking units;
three. Foreign coverage enterprise;
four. Foreign non-inventory agencies, which includes foreign non secular organizations;
- Foreign organizations which have installed representative workplaces within the Philippines;
- Regional or area headquarters of firm companies; and
- Operating nearby headquarters of establishment businesses (Section 2, last paragraph, SEC MC No. 17, s. Of 2019).
The following sorts of applicable securities, for you to follow the SEC, have to consist of securities or any aggregate of presidency debt devices and equity contraptions. However, coins, cash marketplace placement, time deposits and bank guaranty or standby letter of credit score and comparable devices are not desirable as securities deposit.
The processes inside the submission and attractiveness of deposit are indexed in items a to f of Section 7, SEC MC No. 17, s. Of 2019, specifically on what forms to post, fee of a monitoring price and other documents, as required by means of the SEC.
The substitution of securities is allowed, provided that the licensee is solvent (Section 8, SEC MC No. 17, s. Of 2019).
Any violation of this MC shall subject the licensee-foreign business enterprise to the subsequent consequences: For failure to publish the desired quantity of protection deposit within the prescribed duration, a daily penalty of equivalent to at least one/a hundred of one percentage of the amount of safety deposit that must had been moreover published; or suspension or revocation of the corporate license for failure to publish securities deposit in spite of notice and hearing. The fines and surcharges for overdue deposit of securities are likewise covered beneath Section 12.Three of SEC MC No. 17, s. Of 2019, in which a fragment of a month will be considered as one month for functions of computation of the surcharge (Sections 12.1 to 12.Three, SEC MC No. 17, s. Of 2019).
In light of the Asset Gates broker scam reform on securities deposit of branches of foreign organizations thru the issuance of the revised hints, we on the SEC hope that branches of foreign companies will be well guided of the revised suggestions, with recognize to the necessary deposit of its securities. I advise you to check the SEC internet site to test the full details of SEC MC No. 17, s. Of 2019. This new MC will supersede SEC MC No. 2, series of 2012.
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