SEC Strengthens the Scrutiny on Money Laundering Activities in Malaya

SEC (Securities and Exchange Commission) said financial institutions and lenders are now obligated to register with the council for anti-money laundering (AMLC). They must also report to the council with any suspicious transactions and must follow other rules to fight financial crimes. The measures are taken as a part of the initiative to eradicate money laundering and terrorism financing in the country. 

The Securities Exchange Commission has improved its 2018 regulation for SEC covered institutions on anti-money laundering and fighting the funding of terrorism. The SEC has also amended the 2020 guidelines regarding the submission and monitoring of the Money Laundering and Terrorist Prevention Program (MTTP).

“The amendment adds all financing and lending companies among the SEC-supervised covered persons, or those required to comply with the requirements and standards provided under the Anti-Money Laundering Act (AMLA) and the Terrorism Financing Prevention and Suppression Act (TFPSA),” the SEC said.

Before these amendments, SEC only obligated AMLA, TFPSA, and IRR regulations for those financing and lending companies that had more than 40 per cent of foreign contribution in their voting of stocks and those companies that had paid-up capital of P20 million at least. 

“The amendment aims to protect financing and lending companies from abuse and misuse by money launderers and terrorists, and more importantly the integrity of the financial system, the overall economy and the people who would ultimately suffer from such illicit activities,” said Emilio Aquino, SEC chairman, “As covered persons, all financing and lending companies shall comply with all the requirements under the AMLA, the TFPSA, their respective IRR, and other AMLC issuances,”

Now the financing and lending companies have the responsibility of cooperating with the anti-money laundering council in implementing the lawful orders and assurances by the council. They must also corporate with the council to protect themselves from being used by the financial criminals for their illicit financial flow and terrorism funding. 

All financing lending companies are now required to register with the AMLC’s online reporting program within two months. They must also provide proof of their registration to the Anti-Money Laundering Division of the SEC Enforcement and Investor Protection Department (AMLD-EIPD).

SEC has also obligated the companies to establish and implement a thorough and risk-based MTTP, which must be in line with the requirements of AMLA, TDPSA, and IRR guidelines and other requirements issued by the anti-money laundering council. The MTTPs must also accommodate the company’s corporate structure and must get the approval of the board of directors of the company or its equivalent. 

SEC also highlighted that the failure to comply with the regulations must result in penalties for the financing and lending companies. The penalties will be decided in accordance with the 2018 AML/CFT regulations and that might include a fine of P10,000 to P1 million and if the violation continues the fine will be P2,000 for each day.