Philippine Plans to Introduce New Regulations on Beneficial Ownership
The Securities and Exchange Commission in Philippine has laid out new regulations that require transparency of beneficial owners, principals, and nominators within ten days after registering a company.
These new rules made by the SEC have been made to increase transparency to the ownership of the organizations. This is done to eliminate their involvement in money laundering crimes or the financing of terrorists.
SEC stated in a draft circular, “It is well established that the risk of misuse of corporate vehicles for purposes contrary to law such as money laundering and terrorist financing arises from the lack of transparency of beneficial ownership of such corporate vehicles.”
SEC has also laid out the measures to ban the issuance, public offering, or sale of the bearer shares and warrants in the country.
According to the circular, “The issuance of bearer shares and bearer share warrants similarly hides the identity of such beneficial owners and thereby increases the risk of misuse of the corporation.” Issuance of bearer shares and warrants is no longer allowed in the Revised Corporation Code of the Philippines.
The SEC recommended that the disclosure of beneficial owners’ filing process must be carried out ten days to the Anti-Money Laundering Division of the Enforcement and Investor Protection Department (AMLD-EIPD). The regulators have also obligated that the organizations registered at SEC must record accurate and verified information related to the beneficial owners.
If these guidelines are violated, the SEC will fine the organizations from PHP 5,00 to PHP 2 million. For each day’s continuation of the violation, they will be fined PHP 1,000 for each day. Other than that, the organizations will face the permanent cease of order and the corporation’s certification will be revoked. The company’s assets will also be dissolute.