BusinessMirror

SEC won’t expand to unlisted firms rule on doing Srs–exec

- B VG C @villygc

THE Securities and Exchange Commission on Wednesday said it is not bent on expanding its rule on mandatory submission of sustainabi­lity report to non-listed companies, but said it is keen on making the rule mandatory for public companies starting next year, and possibly expanding it to other institutio­ns.

During the BUSINESS MIRROR Coffee Club online forum, titled Sustainabi­lity Reporting: Sustaining the Sustainabl­e, SEC Commission­er Kelvin Lester K. Lee said the agency cannot just implement the rule on other private, especially smaller firms, due mainly to cost issues.

He said, however, the agency may expand it to other firms that deal with public companies—these may include the stock brokers and bond issuers and other larger firms that are not yet listed.

“I hesitate to force the issue on non-publicly listed companies. We are assessing. But on the publicly listed companies ... we’ re making it mandatory in 2023. ere’s a separate set of discussion­s for that from the stakeholde­rs, but the current mindset [is to make it mandatory],” Lee said.

Larger companies, in theory, can be forced to submit their sustainabi­lity report, which they may use during their fund-raising activities, as cost will not become an issue, though it may be harder for smaller firms, Lee said.

“Of course I understand where they are coming from such as cost and other difficulti­es and this is a complex topic that we cannot just roll out immediatel­y,” he said.

SEC currently has an assessment period for the reports that were submitted to them that began last year.

Lee said the agency has partnered with the Philippine Institute of Certified Public Accountant­s (Picpa) to come out a study later this year on how it will analyze those reports that were submitted to them and also to inform the general public on what the listed companies have so far done in terms of sustainabi­lity reporting.

“Whether or not they...actually do it, we can invoke our visitorial powers but maybe not quite yet because of the pandemic. But rest assured we are looking at the reports and we are assessing these with our partner institutio­ns whether or not they are complying,” Lee said.

In 2019, the SEC issued a memorandum to mandate listed companies to submit a separate report on sustainabi­lity outside of the annual report they are required to file with the agency.

e report should follow the guidelines set by the SEC, mainly drawn from the standards set by the Global Reporting Initiative.

For the first three years starting in 2019, the SEC adopted a complyor-explain approach, in which companies would be required to submit the report and if the informatio­n is not available, explain to regulators why data is not yet there.

e SEC will have to check the quality of the report, while the PSE will mine these reports as basis for its Belle Awards, which gives out citations for those compliant firms.

e agency will penalize those who failed to comply with the rule.

“is is the best time to focus on sustainabi­lity; there’s a focus on it because of Covid.

Now is the perfect time; it is not something we set aside to move forward and say we’ll focus on that...no. it seems that all indication­s that the interest are there, the focus is there so it is clear that we have to do it, why not now. Sustainabi­lity is everyone’s responsibi­lity,” Lee said.

 ??  ?? SEC Commission­er Kelvin Lester K. Lee
SEC Commission­er Kelvin Lester K. Lee
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