SEC rules vs dirty money now cover all financing, lending firms

ALL financing and lending institutions are now covered by the Securities and Exchange Commission’s (SEC) guidelines on anti-money laundering (AML) and combating the financing of terrorism (CFT).

The SEC released on Tuesday the 2020 guidelines on the submission and monitoring of the Money Laundering and Terrorist Prevention Program (MTPP).

The commission said: “There is a need to subject financing companies and lending companies to supervision and monitoring for AML/CFT purposes to ensure that such companies are not used for money laundering or terrorist financing.”

Previous rules covered only financial and lending companies with over 40% foreign participation in its voting stock and those with a paid-up capital of P10 million or more.

The amended guidelines also forego Section 5 of the 2020 Guidelines on the Submission and Monitoring of the Anti-Money Laundering and Terrorist Financing Prevention Program, which provides additional rules for financing and lending companies that have reached the threshold P10-million minimum paid-up capital or those with below 40% foreign equity.

All financing and lending companies supervised by the SEC are required to comply with the requirements under the Anti-Money Laundering Act (AMLA) and the Terrorist Financing Prevention and Suppression Act (TFPSA), their respective implementing rules and regulations, and other guidelines of the Anti-Money Laundering Council (AMLC).

Companies are also expected to register with the AMLC’s online reporting system, in accordance with the AMLC registration and reporting guidelines.

Financial and lending companies not yet registered with the AMLC are given two months from the effectivity of the amended guidelines to register and submit proof to the SEC’s Anti-Money Laundering Division of the Enforcement and Investor Protection Department (AMLD-EIPD).

“The AMLD-EIPD shall enforce and monitor compliance with this circular in coordination with other operating departments of the commission and impose the applicable sanctions for any violation thereof as may be warranted,” the SEC said.

A detailed and risk-based money laundering and terrorist financing prevention program should also be created by the companies in accordance to their corporate structure and risk profile. The SEC said these should be compliant to the guidelines of AMLA, TFPSA, and AMLC.

Companies are given two months from the effectiveness of the circular to accomplish their respective programs, which should be approved by their board of directors or its equivalent for local branches of foreign financing or lending companies. — Keren Concepcion G. Valmonte