The Securities and Exchange Commission (SEC) has required all financing and lending companies to register with the Anti-Money Laundering Council (AMLC) and to report suspicious transactions and comply with other rules and standards aimed at combating money laundering and terrorism financing in the country.
The agency released its SEC Memorandum Circular No. 4, Series of 2021 on March 30, which amended the SEC Guidelines on Anti-Money Laundering and Combating the Financing of Terrorism for SEC Covered Institutions (2018 AML/CFT Guidelines) and the 2020 Guidelines on the Submission and Monitoring of the Money Laundering and Terrorist Prevention Program.
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 and the Terrorism Financing Prevention and Suppression Act.
Prior to the amendment, the SEC only required financing and lending companies with more than 40 percent foreign participation in their voting stocks and those with paid-up capital of at least P10 million to comply with the two laws.
“The amendment aims to protect financing and lending companies from abuse and misuse by money launders 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,” SEC Chairman Emilio B. Aquino said.
All financing and lending companies shall comply with all the requirements under the two laws to combat money laundering and they shall also have the duty to cooperate with the AMLC’s mandate and to protect their businesses from being used for money laundering.
All financing and lending companies must register in the online reporting system of the AMLC and submit proof of such registration to the Anti-Money Laundering Division of the SEC Enforcement and Investor Protection Department within two months from the effective date of the newly issued memorandum circular.
The SEC also directs all financing and lending companies to formulate and implement a comprehensive and risk-based Money Laundering and Terrorist Financing Prevention Program. The program must be designed in accordance with the company’s corporate structure and risk profile, and should be duly approved by the company’s board of directors or by the country, regional or area head or its equivalent for the local branches of foreign financing and lending companies.
The memorandum circular shall take effect 15 days after its publication in two national newspapers of general circulation.
Firms that will fail to comply with the provisions of the newly issued memorandum circular face a fine of P10,000 to P1 million, plus up to P2,000 for each day of continuing violation.
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