The Securities and Exchange Commission (SEC) said companies may now apply for the extension of the validity of their financial statements to 180 days from the previous 135 days.
“DMCI [Holdings Inc.] already requested 180 days’ effectivity for their financial statements from 135 days to 180 days. Same for San Miguel Corp. There was a policy shift…everyone can now apply. You can be granted an extension of the duration of financial statements that can help in the process of registration and filing at the SEC,” SEC Commissioner Ephyro Luis Amatong said in a press briefing on Friday.
The lengthened 180-day duration of the firms’ financial statements (FS) would mean more room to process registration filings at the SEC.
Amatong explained that the extended FS duration will give more leeway for companies’ filings to be approved by the commission, emphasizing that the SEC “usually takes a long time to approve” filings.
If a financial statement expires while the company’s registration is still pending or ongoing, the company will have to re-file its registration, this time with the succeeding financial statement, which further prolongs the registration time at SEC.
The SEC Commissioner said that the 180 days extended validity of FS is “important” and “within the Asean standards,” noting that if a company files its nine months’ FS ending in September by October or November, the validity of the FS can now last up to April or May from the four months to February or March previously.
A common scenario encountered by many companies before the policy change was when the validity of the FS expired in February or March, within a kind of “dead space” on the calenday as end-year FS of firms usually come out by April, almost at the same time as the first quarter FS releases. In this usual scenario, firms will wait for the April FS to be done, then again file their registrations to the SEC and wait for the commission to approve them.
“With the extension, both firms and SEC will be able to move faster concerning the registration filings,” Amatong said, expressing the hope that there will be faster and more efficient approval of registration filings moving forward.