Disqualifications of directors, trustees, officers of corporations

BY virtue of Sections 26 and 27 of Republic Act 11232 or the "Revised Corporation Code of the Philippines" (RCC), the Securities and Exchange Commission (SEC) has issued draft rules on the disqualifications of directors, trustees and officers of corporations and guidelines on the procedure for their removal. The draft memorandum circular (MC) was released on the SEC website (www.sec.gov.ph) on Dec. 17, 2021 for public comment.

The draft MC governs all matters of hearing and proceedings before the SEC for independent administrative actions for the removal of directors, trustees and officers; removal of directors, trustees and officers as a sanction in the commission's proceedings; and the imposition of sanctions on the board of directors or trustees who, with knowledge of the disqualification, failed to remove a disqualified director or trustee.