Regulatory Alerts2018-04-23
SEC Memorandum Circular No. 8 s.2018: Shareholder Approval for External Auditor Changes and Audit Committee Composition
The Securities and Exchange Commission of the Philippines issued this memorandum circular to implement initiatives aimed at improving the country's ranking in the Ease of Doing Business Report. The directive mandates that all publicly-listed companies must obtain shareholders' approval for any changes to their external auditor. Additionally, it requires that the audit committee of these companies be composed entirely of board members.
Securities and Exchange Commission P H I L I P P I N E S
SEC MEMORANDUM CIRCULAR NO. 8 Series of 2018
TO : ALL PUBLICLY-LISTED COMPANIES
SUBJECT : 1) SHAREHOLDERS' APPROVAL ON ANY CHANGE/S IN THE COMPANY'S EXTERNAL AUDITOR 2) AUDIT COMMITTEE COMPOSED ENTIRELY OF BOARD MEMBERS
DATE : 20 April 2018
Pursuant to Sections 2(d) and 3 of Administrative Order No. 38 (AO 38) of the Office of the President, the Commission in its en banc meeting on 19 April 2018 resolved to implement initiatives to improve the Philippines' ranking in the Protecting Minority Investors indicator of the Ease of Doing Business (EODB) Report, which include the adoption of the following rules:
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All Publicly-listed companies (PLCs) shall seek shareholders' approval on any change/s in the company's external auditor; and
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All PLCs shall have an Audit Committee that are composed only of board members.
This Memorandum Circular shall take effect immediately after its publication in two (2) newspapers of general circulation in the Philippines.
Pasay City, Philippines, 20 April 2018.
For the Commission:
[Signature] TERESITA J. HERBOSA Chairperson