The Securities and Exchange Commission (SEC) is pushing for greater transparency in the beneficial ownership of corporations by requiring the disclosure of varying controls that owners exercise and by expanding access to such information.
The SEC on October 10 issued for public comment the draft memorandum circular on the Revised Guidelines on Beneficial Ownership Disclosure and Transparency.
The draft guidelines aim to consolidate all the rules and regulations promulgated by the SEC pertaining to the identification, declaration and submission of accurate beneficial ownership information by all corporations registered with the commission.
Developed in collaboration with Open Ownership and the United Nations Office on Drugs and Crime, the policy aligns with the multi-pronged approach of the Financial Action Task Force to beneficial ownership disclosure. It prohibits bearer shares, mandates disclosure of nominee arrangements, and imposes proportionate sanctions for non-compliance and false declarations.
‘By strengthening beneficial ownership information disclosure, we are addressing critical gaps that enable corruption and financial crime in the country, complementing broader government efforts to combat corruption and illicit financial activities,’ SEC Chairman Francis E. Lim said.
‘This policy underscores our unwavering commitment to transparency and accountability in the corporate sector, aligning the Philippines with global standards in combating money laundering and countering the financing of terrorism,’ he said.
The proposed rules will apply to all entities under the jurisdiction of the SEC, including domestic stock and non-stock corporations, partnerships, foreign corporations, one-person corporations and incorporators, directors, trustees, officers, and shareholders or members of corporations, among others.
All beneficial owners of the covered entities shall be disclosed, with their respective categories reported. There are nine categories of beneficial owners under the draft, categorized from A to I, namely: Ownership, Contractual Control, Board Election Power, Dominant Influence, Direction of Board, Property Stewardship, Nominee Arrangements, Other Control Mechanisms, and Senior Management.