QuestionsQuestions (SEC MEMORANDUM CIRCULAR NO. 14, S. 2014)
The main subject is the exemption of Financing Companies registered as Close Corporations from the requirement to elect at least two independent directors on their boards.
Financing Companies that are registered as Close Corporations under Title XII of the Corporation Code of the Philippines.
They must amend their Articles of Incorporation to include provisions for close corporations, issue commercial papers only to Directors, Officers, Stockholders, and Related Interests not exceeding 19 persons and to institutional lenders, and impose restrictions on share transfers in their Articles of Incorporation, By-Laws, and Stock Certificates.
Close Corporations are governed under Title XII of the Corporation Code of the Philippines.
SRC Rule 9.2, as amended, governs the issuance of commercial papers to DOSRI and institutional lenders.
Because they need to explicitly state the provisions of the Corporation Code related to Close Corporations to comply with the conditions for exemption.
Restrictions on the right to transfer shares must be included in the Articles of Incorporation, By-Laws, and Stock Certificates.
The Memorandum Circular took effect immediately upon its issuance on June 27, 2014.
The Memorandum Circular was signed by Teresita J. Herbosa, Chairperson of the Securities and Exchange Commission.