The Securities and Exchange Commission (“SEC”) issued Memorandum Circular (“MC”) No. 24, Series of 2019, advising the public of the adoption of the Code of Corporate Governance for Public Companies and Registered Issuers (the “CG Code”), which takes effect on 12 January 2020.
Pursuant to SEC MC No. 24, a Public Company and a Registered Issuer[1] will have to submit the following on or before 30 January 2020:
- Certification of its Compliance Officer on its compliance with the Revised Code of Corporate Governance; and
- Certification of its Corporate Secretary on the record of attendance in board meetings for the year 2019.[2]
Public Companies and Registered Issuers are not required to comply with the CG Code. However, they must state in their annual corporate governance reports whether they comply with the provisions of the CG Code, identify any areas of non-compliance, and explain the reasons for non-compliance.[3]
The CG Code supersedes SEC MC No. 06, Series of 2016 (Revised Code of Corporate Governance), SEC MC No. 09, Series of 2014 (Amendment to the Revised Code of Corporate Governance), and SEC MC No. 04, Series of 2017 (Term Limits of Independent Directors).
[1] Under Item (5) of the Introduction of the CG Code, a Public Company is “a company with assets of at least PhP50,000,000.00 and having 200 or more shareholders holding at least one hundred (100) shares each of equity securities.” Meanwhile, a Registered Issuer is “a company that: (1) issues proprietary and/or non-proprietary shares/certificates; (2) issues equity securities to the public that are not listed in an Exchange; or (3) issues debt securities to the public that are required to be registered to the SEC, whether or not listed in an Exchange.”
[2] Item (4) of SEC MC No. 24.
[3] Item (2) of the Introduction of the CG Code.