Capitalists And Money

SEC FS filing deadline looming

Every year, accountants and auditors undergo a unique form of penance during Holy Week, extending their hours or even sacrificing sleep to ensure the timely filing of Annual Financial Statements (AFS).

In response to the prayers of our accountants and auditors, and to alleviate congestion in the Securities Exchange Commission (SEC) Electronic Filing and Submission Tool (eFAST) for those operating on a calendar year, the SEC, through Memorandum Circular (MC) No. 2-2024, has once again instituted staggered filing schedules for the AFS of all corporations, including branch offices, representative offices, regional headquarters, and regional operating headquarters of foreign corporations. The filing dates are determined by the last numerical digit of their SEC registration or license numbers, as follows:

AFS filing is exclusively conducted through the SEC eFAST. The SEC MC confirms that other forms of report submission (i.e., over-the-counter, mail, or courier services previously facilitated through the SEC Express Nationwide Submission facility) will no longer be accepted.

Thus, SEC-registered entities are encouraged to strategize their submissions in advance of the designated submission dates and consider filing before April 29. Beginning April 29, strict adherence to the prescribed filing schedule is mandatory.

Some corporations with deadlines falling in June or July should still consider filing ahead of their actual deadline. This is because the deadline for filing the Annual Income Tax Return with the Bureau of Internal Revenue (BIR) remains fixed at April 15, and the submission must be accompanied by the AFS.

Moreover, it should be noted that the above filing schedule does not apply to the following corporations:

1. Those whose fiscal years end on a date other than Dec. 31, 2023. These entities must file their AFS within 120 calendar days from the end of their respective fiscal years.

2. Those whose securities are listed on the Philippine Stock Exchange (PSE), those whose securities are registered but not listed on the PSE, those considered public companies, and other entities covered under Sec.17.2 of the Securities Regulation Code (SRC) or the Republic Act No. 8700. These entities must file their AFS within 105 calendar days after the end of their fiscal year, as an attachment to their Annual Reports (SEC Form 17-A), in accordance with the Implementing Rules and Regulations of the SRC. Non-listed registered issuers of securities who submitted SEC Form 17-EX (Notification of Suspension of Duty to File Reports under Section 17 of the SRC) for 2024 are required to adhere to the regular AFS filing period, which spans 120 calendar days from the end of the fiscal year.

3. Those whose AFS are being audited by the Commission on Audit.

Ideally, corporations strive to minimize unnecessary delays. Therefore, it is imperative to ensure the accurate submission of the required information and attachments to prevent repetitive filings. For instance, this includes ensuring that the AFS reflects the “received” stamp by the BIR or its authorized banks, unless the BIR permits an alternative proof of submission, such as the system-generated Transaction Reference Number. Additionally, submissions may be rejected if the uploaded report exhibits poor image quality, is in a horizontal image orientation, or if the submission form contains inaccuracies regarding company profile, period covered, or submission type.

While access to the eFAST platform will be available 24 hours a day, the review, acceptance, and any reversions by the SEC personnel will be processed exclusively from Mondays to Fridays. Submissions made on Saturdays, Sundays, holidays, or during work suspensions will be deemed filed on the subsequent working day.

AFS submissions from corporations failing to upload their reports on time or within the scheduled dates (commencing April 29) will be accepted from July 8 onwards. These delayed submissions will incur prescribed penalties calculated from the filing deadline. As of now, the SEC has not announced the new scale of fines and penalties.

However, with the anticipated proposed rates and stricter penalties for late or non-filing, corporations should submit their annual reports promptly.

Corporations have the option to settle the applicable penalties at a later time or when they undergo monitoring or when the SEC identifies late filings or unmet reporting requirements.

The SEC’s former amnesty program, integration of online filing, and reinforcement of penalties underscore the critical importance of punctual AFS submissions for corporations. Although fines are not imposed on late filing of the AFS and General Information Sheet, late filing will still result in penalties upon securing the SEC Monitoring clearance, which is a prerequisite for most SEC applications. As we anticipate the SEC’s forthcoming announcement on revised fines and penalties, it’s essential for corporations to prioritize compliance, ensuring seamless operations and regulatory alignment in today’s ever-evolving business environment.

The views or opinions expressed in this article are solely those of the author and do not necessarily represent those of Isla Lipana & Co. The content is for general information purposes only, and should not be used as a substitute for specific advice.

Cyril Pestilos is a manager at the Tax Services department of Isla Lipana & Co., the Philippine member firm of the PwC network.

+63 (2) 8845-2728

cyril.b.pestilos@pwc.com