JK&C LIBRARYSEC Memorandum Circular No. 18, s. 2004
Overview
SEC Memorandum Circular No. 18, Series of 2004, provides guidelines for implementing Section 6(c) of the Rules and Regulations implementing Republic Act No. 8556, otherwise known as the Financing Company Act of 1998. The circular establishes requirements governing the minimum capitalization of financing companies that have or intend to maintain branch offices.
Under the circular, a financing company whose head office is located in an area requiring a lower minimum capital, but which maintains or proposes to maintain a branch office in an area requiring a higher minimum capital, must have paid-up capital corresponding to the higher capital requirement. This is in addition to the required additional capital for the branch office.
Existing financing companies affected by this requirement, including those that had previously submitted an undertaking to build up their capital, were required to submit a capital build-up program within fifteen (15) days from the effectivity of the circular. The circular also prescribed specific capital build-up percentages depending on whether the program was to be completed within one, two, or three years.
Full Text
Overview
SEC Memorandum Circular No. 18, Series of 2004, provides guidelines for implementing Section 6(c) of the Rules and Regulations implementing Republic Act No. 8556, otherwise known as the Financing Company Act of 1998. The circular establishes requirements governing the minimum capitalization of financing companies that have or intend to maintain branch offices. Under the circular, a financing company whose head office is located in an area requiring a lower minimum capital, but which maintains or proposes to maintain a branch office in an area requiring a higher minimum capital, must have paid-up capital corresponding to the higher capital requirement. This is in addition to the required additional capital for the branch office. Existing financing companies affected by this requirement, including those that had previously submitted an undertaking to build up their capital, were required to submit a capital build-up program within fifteen (15) days from the effectivity of the circular. The circular also prescribed specific capital build-up percentages depending on whether the program was to be completed within one, two, or three years.
Short Title / Subject
SEC Memorandum Circular No. 18, s. 2004
Full Text
REPUBLIC OF THE PHILIPPINES
SECURITIES AND EXCHANGE COMMISSION
CORPORATION FINANCE DEPARTMENT
6TH FLR. BLDG. EDSA, GREENHILLS, MANDALUYONG CITY
TEL NOS. 725-8505; 726-2264 FAX: 727-2990
Website; http://www.sec.gov.ph
SEC Memorandum Circular No. 18
Series of 2004
To : All Financing Companies
Subject: Required Paid-Up Capital of Head Office
To rationalize the implementation of Section 6(c) of the Rules and Regulations to Implement the Provisions of Republic Act No. 8556 (The Financing Company Act of 1998), the following guidelines to govern minimum capitalization required of Financing Companies proposing to have or maintaining branch offices are hereby promulgated:
1. All financing companies with Head Office in locations which require a lower minimum capital maintaining or proposing to maintain Branch Office/s in locations which require a higher minimum capital shall have a minimum paid-up capital corresponding to that of higher capitalized locations. This is in addition to the required additional capital for the Branch Office;
2. All existing financing companies affected by the above provision including those which submitted an undertaking to build up their capital shall submit a program of capital build-up within fifteen (15) days from the effectivity of this Circular;
3. The program of capital build up to be submitted shall be as follows:
No. of Years to Build uP |
First Year |
Second Year |
Third Year |
3 |
20% |
30% |
50% |
2 |
50% |
50% |
|
1 |
IOO%(50%/6 mos.) |
|
|
4. A proof of compliance with the paid-up capital consisting of a certification under oath by the Treasurer for every indicated period shall be submitted not later than thirty (30) days following the indicated date;
5. Failure to comply with the aforesaid program shall be subject to a basic penalty ofPhp10,000.00 plus Php 100.00 for every day of delay
This Circular shall take effect fifteen (15) days following its publication in a newspaper of general circulation.
Issued this 18th day of November, 2004 at EDSA, Greenhills,
Mandaluyong City, Philippines.
FE B. BARIN
Chairperson
Source
Official Source: Securities and Exchange Commission
Official URL: https://www.sec.gov.ph/mc-2004/sec-memorandum-circular-no-18-3/#gsc.tab=0
Citation
Securities and Exchange Commission (SEC), Memorandum Circular, SEC Memorandum Circular No. 18, s. 2004, SEC Memorandum Circular No. 18, s. 2004, 2004-11-18
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Source
Securities and Exchange Commission Official source
Citation
Securities and Exchange Commission (SEC), Memorandum Circular, SEC Memorandum Circular No. 18, s. 2004, SEC Memorandum Circular No. 18, s. 2004, 2004-11-18