ASIA: Philippine SEC Orders Corporations to Declare Beneficial Owners.

As published on regulationasia.com, Tuesday 2 March, 2021.

Corporations in the Philippines have until 31 March to submit an online form declaring their beneficial owners, principals and nominee arrangements.

The Philippine SEC (Securities and Exchange Commission) has notified newly registered and existing corporations that they will need to disclose the identity of their beneficial owners, principals and nominee arrangements in an online declaration form by 31 March.

The new notice is in accordance with a recently issued memorandum circular from the SEC, which set out new guidelines aimed at promoting greater transparency in the ownership of corporations.

The new guidelines were proposed last December and adopt recommendations issued by the FATF (Financial Action Task Force) in its October 2019 mutual evaluation report.

Specifically, the report recommended the introduction of measures to ensure that bearer share warrants, nominee directors and nominee shareholders are not misused for money laundering and terrorist financing.

The SEC memorandum circular stipulates that nominee directors, trustees, and shareholders of existing corporations would be required to disclose their nominators and principals within 30 days after the guidelines take effect, or within 30 days from the time they assumed the roles in their respective companies.

The disclosure should include the full names, country of residence, nationality and TIN (tax identification numbers), or in the absence of such TIN, the passport numbers of the nominators or principals and the person on whose behalf the corporation was registered.

In addition, all corporations are required to keep sufficient and accurate data on their beneficial owners at their principal offices.

Information on submitting the so-called BOTD (Beneficial Ownership Transparency Declaration) form is available here.

Those who will fail to submit the BOTD form can face penalties between PHP 5,000 (USD 102) and PHP 2 million, as well as PHP 1,000 per day for continuing violations. Violators can also face suspension or revocation of their certificate of incorporation, among other penalties.

The online submission of the BOTD form is part of SEC’s digitisation drive to develop and implement an electronic filing and monitoring systems, which serve to further limit face-to-face interactions during the pandemic, automate business transactions and promote sustainable business practices.

According to local reports, the SEC will soon allow corporations and partnerships to file their audited financial statements and other reports in digital format and remotely through a newly developed online submission tool.

Corporations, partnerships, and their authorised filers will be able to enrol for the new tool tentatively on 15 March.

Within this year, the SEC will require all stock corporations, including the branch offices, representative offices, regional headquarters and regional operating headquarters of foreign corporations, to submit their reports using the new online submission tool, to be known as OST.

Non-stock corporations will be required to submit their reports through the OST by 2022.

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