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SEC Proposes Amendment to Rules on Publication of Interim Fin. Statement, Shelf Registration

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Tuesday, March 27, 2018 /6:15 PM /SEC 

Sundry Amendments
 

Proposed Amendment To Rule 41(4): Publication Of Interim Financial Statement
All public companies shall publish their “signed” quarterly balance sheet, income statement and cash flow statements in at least one (1) national daily newspaper. However, the accounting policies, notes and other relevant information shall be posted on the company’s website which address shall be disclosed in the newspaper publication. The publication shall be signed by the officers mentioned in (3) above. 

Proposed Amendment: Creation of a Proviso
Provided that public companies listed on the AseM may publish their “signed” quarterly balance sheet, income statement and cash flow statements, accounting policies, notes and other relevant information on the company’s website only. 

Justification
The proposed rule will reduce the cost of publication for small companies listed on the AseM. 

Proposed Amendment to Rule 279(3) (5) (Ii): Shelf Registration
A shelf Prospectus shall be effective for a period of three years from the date of its issue and shall be subject to renewal as may be approved by the Commission. Provided, that the Shelf Prospectus of sub-nationals shall be effective for an indefinite period until determined by the Commission. 

Proposed Amendment
A shelf Prospectus shall be effective for a period of three years from the date of its issue and shall be subject to renewal as may be approved by the Commission. Provided, that the Shelf Prospectus of supranational agencies shall be effective for an indefinite period until determined by the Commission. 

Renumbering of Rule 279(5)(ii)(2&3) as amended on December 6, 2013 to be known as Newly Created Rule 279 (3) (8) (c):

(c). In the case of a shelf prospectus which is effective for an indefinite period:
 

(i) Information in the Shelf Prospectus shall be updated prior to the issuance of any tranche/series.
 

(ii) The shelf prospectus shall be updated by the filing of an addendum to the Shelf Prospectus with the Commission.

(iii) The addendum may include an information statement and/or any other relevant information and shall be incorporated by reference in any tranche/series to be issued.
 

Justification
The shelf life of a Shelf Programme by Supranational Agencies was made effective/valid indefinitely by a 2013 Rule amendment, to allow supranational agencies unfettered and quick access to the capital market in view of the fact that their status made for little change in their material information. However a 2015 amendment which sought to extend the shelf life of the Shelf Programmes of other Issuers from 2 years to 3 years –in line with international best practice, inadvertently substituted the word ‘Supranational Agencies’ with ‘Sub-nationals’. 

It is necessary to urgently correct this error to avoid perpetuating an irregularity since the regular changes in the material information of Sub-nationals should make it imperative that their Shelf Programme have a fixed life as material information of Sub-nationals quickly becomes stale or of no effect.
 

In addition subs (2), (3) and the last paragraph of the 2013 amendment is better situated under Rules 279 (3)(8) as a new sub (c) (i), (ii) and (iii) to make for a logical flow.
 

Proposed Amendment to Schedule ii of the Commission’s Rules And Regulations: Insertion Of Penalty For Diversion/Misapplication Of Issue Proceeds
 

Proposed amendment
: Addition to Schedule II
Diversion/misapplication of Issue proceeds – MPR+2% on the amount of proceeds diverted/misapplied 

Justification
Arising from the comments received on exposed Rules on Green Bonds, other instances of misapplication of issue proceeds were disclosed. To curtail such diversion/misapplication of issue proceeds, it became necessary to propose a stiffer penalty.
 

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