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SEC OGC Opinion No. 10-17

1. The Revised Code of Corporate Governance applies mandatory compliance for registered domestic corporations and foreign corporations operating in the Philippines that meet certain asset and shareholder thresholds or have securities listed on an exchange. 2. Under the Corporation Code, the corporate secretary does not need to be a lawyer but must be a resident and citizen of the Philippines. The Revised Code prefers but does not require the corporate secretary to be a lawyer if they are also acting as the Compliance Officer. 3. As long as the corporate secretary meets the legal requirements, the Securities and Exchange Commission cannot ban certain individuals from holding the position of corporate secretary.

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170 views2 pages

SEC OGC Opinion No. 10-17

1. The Revised Code of Corporate Governance applies mandatory compliance for registered domestic corporations and foreign corporations operating in the Philippines that meet certain asset and shareholder thresholds or have securities listed on an exchange. 2. Under the Corporation Code, the corporate secretary does not need to be a lawyer but must be a resident and citizen of the Philippines. The Revised Code prefers but does not require the corporate secretary to be a lawyer if they are also acting as the Compliance Officer. 3. As long as the corporate secretary meets the legal requirements, the Securities and Exchange Commission cannot ban certain individuals from holding the position of corporate secretary.

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Sai Adam
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• Republic of the Philippines

Department of Trade and Industry


0
•
Securities and Exchange Commission
SEC Bldg. ED SA, Greenhills, Mandaluyong City

OFFICE OF THE GENERAL COUNSEL

23 April 2010

SEC-OGCOpinionNo. 10-17
For: Qualification of a Corporate
Secretary; Revised Code of Corporate
Governance

RP ENTERPRISES,INC.
No. 5 Laurel Street
Xavierville III Subdivision, Quezon City

Attention: Mr. F.B. Reyes

Gentlemen:

This refers to your letter dated 06 February 2010 wishing to be informed on


the following:

1. Is the Code of Corporate Governance (now the Revised Code of


Corporate Governance) a mandatory compliance for all corporations?

2. Is the. position of Corporation Secretary exclusive for lawyers? Can the


Commission ban an individual for holding a position of Corporate
Secretary?

With regard to your first query, the Revised Code of Corporate Governance!
applies to registered domestic. corporations and branches or subsidiaries of foreign
corporations operating in the Philippines that:

(a) Sell equity and/or debt securities to the public that are required to be
registered with the Commission; or

(b) Have assets in excess of Fifty Million Pesos and at least two hundred
(200) stockholders who own at least one hundred (l00) shares of each
of equity securities; or

(c) Whose equities are listed on an Exchange; or

1 SEC Memorandum Circular NO.6, Series pf 2009.


Tlttp:/Iwww.sec.gov.ph B +(632)5840923
...
. , ..
, •. ~
•
Cd)Are grantees of secondary license from the Commission.
o
For your second query, the Corporation Code of the Philippines! provides:

"SECT10N25. Corporateofficers, quorum. - Immediately after their election,


the directorsof a corporationmust formally organizeby the electionof a president,who
shall be a director, a treasurerwho mayor may not be a director, a secretary who
shall be a resident and citizen of the Philippines, and suchother officersas may be
providedfor in the by-laws.Any two (2) or more positionsmay be held concurrentlyby
the sameperson,exceptthat no one shallact as presidentand secretaryor as president
and treasurerat the sametime." (Emphasissupplied)

Under the Corporation Code, the minimum requirement is that the corporate
secretary is a resident and citizen of the Philippines and need not be a lawyer. If the
corporation, however, is covered by the Revised Code of Corporate Governance, it is
stated that if the corporate secretary also acts as Compliance Officer, it is preferred
that the corporate secretary be a lawyer.2 As long as the corporate secretary meets
the minimum requirement provided under the applicable law and rules, it is beyond
the Commission to ban certain individuals from the position of a corporate secretary.

It shall be understood that the foregoing opinion is rendered based solely on


the facts and circumstances disclosed and relevant solely to the particular issues
raised therein and shall not be used in the nature of a standing rule binding upon
the Commission in other cases whether of similar or dissimilar circumstances. If,
upon investigation, it will be disclosed that the facts relied upon are different, this
opinion shall be rendered void.

Very truly yours,

(}/L
VERNETIE G. UMALI-PACO
General Counsel

c:\oplnlons\rpentrprises.<b:

1 BatasPambansa Bilang68 (1980).


) RevisedCodeof CorporateGovernance,Article3(F)(m)reads:

"m) Appoint a ComplianceOfficer who shall have the rank of at least vice president. In the
absence of such appointment, the Corporate Secretary, preferably a lawyer, shall act as
ComplianceOfficer."
2

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