The SEC on Sept. 29 released for public comment draft omnibus rules and guidelines that would consolidate the organizational, reportorial and continuing compliance requirements for foundations.
The proposed rules, according to an SEC statement, would provide a single, updated reference containing the forms, templates, instructions and procedures foundations need to comply with SEC requirements.
The commission said the initiative seeks to address difficulties encountered by foundations because existing requirements are contained in various laws, rules, memorandum circulars and other SEC issuances.
Registration rules
The proposed rules would cover all foundations registered with or applying for registration with the SEC.
A foundation is a non-stock, non-profit corporation established to extend grants or endowments or raise funds for charitable, religious, educational, athletic, cultural, literary, scientific, social welfare and similar purposes.
The draft rules stated that applicants must be organized as non-stock, non-profit corporations, include the word “Foundation” in their corporate name and maintain at least P1 million in paid-up capitalization. The capitalization must be supported by a notarized certificate of bank deposit.
The draft also consolidates foundations’ reportorial requirements.
Their Membership Book must be registered with the SEC within 30 days of incorporation, while the General Information Sheet must be filed within 30 days after the annual meeting. If no annual meeting is held, the GIS must be submitted by Jan. 30 of the following year.
Financial reports
Foundations with total assets or liabilities exceeding P3 million would be required to submit audited financial statements under SEC Memorandum Circular No. 4, Series of 2026.
Those with assets or liabilities of P3 million or less may submit unaudited financial statements signed under oath by designated officers.
Financial statements must be filed within 120 days from the end of the fiscal year or according to the SEC's annual filing schedule.
Simplified forms
The draft rules would also replace an older multi-document reporting requirement under the Revised Rule 68 of the Securities Regulation Code with three Simplified Non-Stock, Non-Profit Organization (NSPO) forms.
The SEC said the forms use clearer language, streamlined reporting items and instructions intended to make compliance easier and more consistent.
They would provide supplemental disclosures on foundations’ operations, governance, programs, projects and use of funds.
Failure to submit the required NSPO forms would carry a P5,000 fine per year, while late filing would be subject to a P2,500 annual fine.
The SEC is accepting public comments on the proposed rules through its designated online form until Oct. 15. —Ed: Corrie S. Narisma
