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SEC releases MC No. 28, imposes penalty for non-compliance

November 25, 2020

In late 2020, the Securities and Exchange Commission (SEC) of the Philippines issued Memorandum Circular No. 28, Series of 2020—commonly referred to as SEC MC 28 2020—introducing a requirement for all registered corporations, partnerships, associations, and individuals to submit an official email address and cellphone number for transactions with the agency. This directive, effective October 31, 2020, aimed to streamline communication and ensure compliance with regulatory obligations amid a growing reliance on digital platforms. More than four years later, SEC MC 28 2020 remains a key regulation, with penalties for non-compliance now firmly enforced and procedural updates reshaping how businesses meet their demands, making it a topic of ongoing importance for Philippine enterprises.

Initial Rollout and Requirements of SEC MC 28 2020

The introduction of SEC MC 28 2020 marked a significant shift in how the SEC interacts with registered entities. Below is a detailed look at its initial provisions and rollout:

Effective Date: SEC MC 28 2020 took effect on October 31, 2020, following its issuance on October 27, 2020, giving businesses a tight window to comply.
Core Requirement: All SEC-registered entities—corporations, partnerships, associations, and individuals—were mandated to provide an official email address and a local mobile number for SMS communication.
Authorized Representatives: The contact details had to be controlled by specific officers, such as the corporate secretary for corporations, the managing partner for partnerships, or the resident agent for foreign entities.
Deadline for Existing Entities: Businesses registered before the circular’s effectivity were given 60 days—until December 30, 2020—to submit their details via the SEC’s online portal or designated email.
New Registrations: Entities registered after October 31, 2020, must comply within 30 days of receiving their business registration certificate.
Purpose: The SEC aimed to enhance efficiency in delivering notices, updates, and regulatory requirements, reducing communication delays.

This initial phase set the stage for a broader push toward digital compliance, though it quickly faced challenges that prompted adjustments.

Extensions and Early Adjustments to SEC MC 28 2020

As businesses grappled with the new mandate, the SEC responded with flexibility. Here’s how the agency adjusted its approach in the early stages:

Original Deadline Pressure: The December 30, 2020, deadline loomed large for thousands of existing entities, many of which struggled with the sudden requirement amid the pandemic.
Extension Granted: On December 28, 2020, the SEC extended the compliance deadline to February 22, 2021, waiving penalties for submissions made by that date.
Rationale for Extension: The agency cited logistical difficulties and the need to accommodate businesses still adapting to remote operations as reasons for the reprieve.
Submission Process: Entities were directed to file their details through the SEC’s Electronic Filing and Submission Tool (eFAST) or via email to a designated address, reflecting an early reliance on digital systems.
Public Response: Business groups welcomed the extension, though some criticized the lack of clarity on penalties for late compliance.

These adjustments provided breathing room but also foreshadowed the SEC’s long-term commitment to enforcing SEC MC 28 2020.

Penalties and Enforcement Under SEC MC 28 2020

Non-compliance with SEC MC 28 2020 carries tangible consequences, which have evolved. Here’s a breakdown of the penalty structure and enforcement trends:

Initial Vagueness: In 2020, the SEC warned of penalties for non-compliance but did not specify amounts, leaving businesses uncertain about the financial risk.
Clarification in 2024: SEC Memorandum Circular No. 6, Series of 2024, effective April 1, 2024, set the penalty at PHP 20,000 for failure to submit the required contact details.
Ongoing Enforcement: As of April 9, 2025, the PHP 20,000 fine applies to non-compliant entities, with the SEC actively monitoring adherence.
Compounding Risks: Repeated violations can lead to delinquency status or revocation of registration under Sections 21 and 177 of the Revised Corporation Code, amplifying the stakes.
Notification Process: The SEC uses the submitted contact details to issue notices of non-compliance, meaning failure to comply also risks missing these warnings.
Historical Context: Earlier leniency, such as the 2021 extension, has given way to stricter enforcement, reflecting the regulation’s maturity.

The clear penalty structure underscores the SEC’s intent to ensure all entities maintain updated contact information.

Relief Programs and Incentives Tied to SEC MC 28 2020

Over the years, the SEC has offered relief to ease compliance burdens. Here’s how these programs have shaped the landscape:

2023 Amnesty Program: SEC Memorandum Circular No. 2, Series of 2023, launched on March 15, 2023, offered amnesty for non-compliance with SEC MC 28 2020, waiving the then-PHP 10,000 penalty for entities that complied by April 30, 2023.
Deadline Extensions: To accommodate more businesses, the amnesty deadline was extended to June 30, 2023 (MC No. 6, Series of 2023) and later to December 31, 2023 (MC No. 20, Series of 2023).
2024 Enhanced Compliance Incentive Plan (ECIP): SEC Memorandum Circular No. 13, Series of 2024, effective August 30, 2024, allowed non-compliant entities to settle fines for PHP 20,000 and update their SEC MC 28 2020 details via eFAST by November 30, 2024.
Eligibility: The ECIP targeted delinquent corporations, offering a path to restore good standing without the full weight of accumulated penalties.
Impact: Thousands of businesses took advantage of these programs, though those missing the deadlines now face the standard PHP 20,000 fine.
Current Status: As of April 9, 2025, these relief windows have closed, leaving full compliance as the only option to avoid penalties.

These initiatives highlight the SEC’s balanced approach—offering leniency while reinforcing the mandate’s importance.

Current Compliance Process for SEC MC 28 2020

The process for meeting SEC MC 28 2020 requirements has evolved with technology. Here’s how businesses comply in 2025:

Digital Platforms: SEC Memorandum Circular No. 23, Series of 2023, integrated compliance into the eSPARC and OneSEC portals, with eFAST as the primary submission tool.
New Corporations: Entities registered after December 28, 2023, automatically comply upon registration, as contact details are now part of the eSPARC process.
Existing Entities: Businesses registered before 2023 must update their details via eFAST, ensuring the email and mobile number remain active and controlled by authorized officers.
Verification: The SEC requires that the email be functional and the mobile number be a local line capable of receiving SMS, rejecting foreign numbers, or inactive accounts.
Frequency: Entities must update their details whenever there’s a change in authorized representatives or contact information, with a 30-day window to report such changes.
Assistance Needed: While the process is streamlined, it involves navigating complex digital systems and regulatory nuances, making professional help from trusted providers like Triple i Consulting invaluable for avoiding errors that could trigger penalties.

This modernized process reflects the SEC’s shift to digital governance, but its complexity can challenge smaller enterprises, emphasizing the need for expert guidance from Triple i Consulting.

Wrapping Up

Over four years after its issuance, SEC MC 28 2020 remains a cornerstone of corporate compliance in the Philippines. What began as a response to pandemic-era communication needs has matured into a permanent fixture, enforced with a PHP 20,000 penalty and integrated into the SEC’s digital ecosystem. Past relief programs, like the 2023 amnesty and 2024 ECIP, offered temporary respite, but as of April 9, 2025, full compliance is non-negotiable for avoiding fines and maintaining good standing. The regulation’s focus on accurate contact details ensures efficient delivery of notices and updates, a priority as the SEC leans further into platforms like eFAST. For businesses, staying compliant is not just about dodging penalties—it’s about keeping pace with a regulatory landscape that demands adaptability and precision.

Is Assistance Available?

Yes, Triple i Consulting stands ready to guide businesses through the intricate compliance process. Contact us today to schedule an initial consultation with one of our experts: