Regulatory Alerts2018-04-23
MC No. 07 s.2018 – Amendment to Rule 38.2.7 of the 2015 Implementing Rules and Regulation of the Securities Regulation Code
The Securities and Exchange Commission of the Philippines amended Rule 38.2.7 of the 2015 Implementing Rules and Regulations of the Securities Regulation Code to modify independence criteria for auditors. The revised rule explicitly requires that auditors have not engaged in transactions with the covered company, its related companies, or substantial shareholders within the last two years, excluding only arms-length and immaterial transactions. This amendment took effect fifteen days after its publication in a newspaper of general circulation in the Philippines.
[Logo: Securities and Exchange Commission PHILIPPINES]
SEC MEMORANDUM CIRCULAR NO. 7 Series of 2018
SUBJECT : Amendment to Rule 38.2.7 of the 2015 Implementing Rules and Regulation of the Securities Regulation Code (SRC)
The Commission, in its en banc meeting, dated 22 March 2018 resolved to amend Rule 38.2.7 of the 2015 Implementing Rules and Regulation of the Securities Regulation Code (SRC). The amended paragraph reads as follows:
SRC Rule 38.2.7. Has not engaged within the last two (2) years and does not engage in any transaction with the covered company and/or with any of its related companies and/or with any of its substantial shareholders, whether by himself and/or with other persons and/or through a firm of which he is a partner and/or a company of which he is a director or substantial shareholder other than transactions which are conducted at arms length and are immaterial.
This amendment shall take effect fifteen (15) days from their publication in a newspaper of general circulation in the Philippines.
Signed this 20 day of April 2018, Pasay City, Philippines.
For the Commission:
[Signature] TERESITA J. HERBOSA Chairperson