The Securities and Exchange Commission (SEC) said an individual will now be disqualified from being a director, trustee, or officer of a company if convicted by final judgment of an offense punishable by imprisonment for more than six years, five years prior to being nominated for the post.
An individual will likewise be disqualified if convicted while holding the office.
The rule forms part of the SEC’s new guidelines on the disqualification of individuals to hold positions in a company.
Under the new rule, an individual may also get disqualified if convicted for violating securities laws like the Securities Regulation Code, Revised Corporation Code of the Philippines (RCC).
“The (person) may also be disqualified if, within five years prior to their election or appointment, or within their tenure, the director, trustee, or officer was found administratively liable by a foreign court or equivalent foreign regulator authority for acts, violations, or misconduct similar to those stated under the RCC,” the SEC said.
“Further, within five years prior to their election or appointment, or within their tenure, a director, trustee, or officer may be disqualified if he/she was found administratively liable by final judgment for refusal to allow the inspection and/or reproduction of corporate records,” the SEC said.
The SEC said an independent administrative action for the removal of a company officer may be commenced “upon the motu proprio issuance of a formal charge by the SEC operating department that has jurisdiction over the subject matter, or upon filing of a verified complaint with the operating department.”
In addition to the removal from post, the SEC may also issue a permanent cease and desist order, and, or impose a fine from P10,000 to P400,000 for each violation of the its orders, or any relevant laws and regulations.
The SEC said it will keep a record of removed individuals to be called “Directors, Trustees, and Officers Index,” containing a record of all orders, decisions, and resolutions involving the removal of an individual.
The SEC said the rule was issued to operationalize the provisions in the RCC after it was amended.
