By: Ines Katrina M. Llamzon

[Editor’s note: This article has been updated on 28 February 2021 to include the Beneficiary Transfer Ownership Guidelines.]

In line with the State policy ensuring that the Philippines shall not be used as a money laundering site for unlawful activities, the Securities and Exchange Commission (SEC) issued Guidelines in Preventing the Misuse of Corporations for Illicit Activities through Measures Designed to Promote Transparency of Beneficial Ownership (BO Transparency Guidelines)[1]. These guidelines shall be applicable to nominee directors/trustees and nominee shareholders, incorporators/applicants for incorporation, and all concerned corporations subject to the supervision and jurisdiction of the SEC.

Prohibition against Issuance/Sale/Public Offering of Bearer Shares or Bearer Share Warrants

In promulgating said Guidelines pursuant to the Revised Corporation Code of the Philippines (RCCP),[2] the SEC prohibits the issuance, sale, or offer for sale or distribution of bearer shares and bearer share warrants.[3]

Disclosure and Recording of Alienation, Sale, or Transfer of Shares

Except for sales or transfers of shares of publicly listed companies through facilities of the Philippine Stock Exchange, the alienation, sale, or transfer of shares of stock shall be disclosed and recorded in the Stock and Transfer Book of the issuing corporation within thirty (30) days from the date of such alienation, sale, or transfer.[4]

Mandatory Disclosure of Principals/Nominators

The SEC also orders the incorporators of corporations applying for registration to disclose the (1) person/s on whose behalf the registration of the corporation was applied for, (2) nominee incorporators or applicants for registration, (3) nominee directors/trustees, and (4) nominee shareholders of the applicant corporation, within thirty (30) days from the issuance of the company’s Certificate of Registration. Otherwise, they shall submit to the SEC a declaration within the same period that they are not nominee incorporators/nominee applicants/nominee directors/nominee subscribers, if such be the fact, and that they are not acting as such for and on behalf of another person.[5]

Further, the SEC instructs all nominee shareholders and nominee directors/trustees of registered corporations to disclose their nominators and principals or persons on whose behalf they act as such shareholders/directors/trustees. This information shall also be disclosed to the corporation in which they are or act as nominee shareholders/directors/trustees. However, this rule shall not apply to the PCD Nominee.[6]

Nominee shareholders/directors/trustees of existing corporations are required to submit online[7] the said disclosure statement within thirty (30) days from the date the BO Transparency Guidelines became effective, 29 January 2021.[8] On the other hand, nominee shareholders/directors/trustees on or after the effectivity of the BO Transparency Guidelines shall submit the same within thirty (30) days from the time they became or assumed the role of or started acting as nominee shareholders/directors/trustees.

Information Required to be Disclosed

Principal/Nominator Information Required
Natural Person/s ·        Full name/s

·        Country of residence

·        Nationality

·        Tax Identification Number (TIN) or Passport Number

Corporation/s ·        Registered name

·        Country of registration

·        Names of incorporators and directors

·        Beneficial owner

·        Tax Identification Number (TIN), if any

Trust ·        Names of trustor/s, trustee/s, and beneficiary/ies

·        Nationality/ies of trustor/s, trustee/s, and beneficiary/ies

·        Country/ies of residence of trustor/s, trustee/s, and beneficiary/ies

·        Tax Identification Number (TIN) or Passport Number of trustor/s, trustee/s, and beneficiary/ies

 

All Covered Institutions under Sec. 3(a) of the Anti-Money Laundering Act (AMLA), as amended, and SEC Memorandum Circular No. 16, Series of 2018 or any amendments thereto are exempted from complying with the disclosure requirement, provided the nominee/trustee arrangements are already subject to Customer Identification Requirements and Record Keeping by Supervising Authorities under the AMLA and its IRR.

Administrative Sanctions

Willful violation of these Guidelines and the making of any untrue statement of any material fact required to be stated or necessary to make the statements therein not misleading shall be sanctioned with a fine, suspension or revocation of the certificate of incorporation, and/or other penalties the SEC has the power to impose.

Webinar to Enhance Knowledge and Understanding of Beneficial Ownership

On February 19, 2021, the SEC will be conducting a webinar for officers and directors of stock and non-stock corporations as part of its outreach program to enhance their knowledge and understanding of the Beneficial Ownership Guidelines and the requirement to disclose Beneficial Ownership information in the General Information Sheet (GIS).

The webinar will be conducted through Zoom from 1:30 to 4:30 in the afternoon. The topics to be discussed are as follows:

  • SEC Memorandum Circular No. 1-2021 (BO Transparency Guidelines)
  • SEC Memorandum Circular No. 30-2020 (Revision of the GIS of Foreign Corporations to Include Beneficial Ownership Information
  • SEC Memorandum Circular No. 15-2019 (2019 Revision of the GIS)

Note that due to the limited slots, only one (1) participant per corporation will be accommodated. Pre-registration at https://forms.gle/1Tw6mrCx4YU7F2YH7 is required.

Beneficial Ownership Transparency Guidelines

The submission of the Beneficial Ownership Transparency Declaration Form (BOTD Form) for newly registered and existing corporations can now be made online by following the steps outlined below:

  1. Download the BOTD Form through these links:Newly-registered corporations: https://www.sec.gov.ph/2021form_botd_sec6/
    Existing corporations: https://www.sec.gov.ph/2021form_botd_sec7/
  1. Download the Consent Agreement Form through this link: https://www.sec.gov.ph/2021botdf_consent-agreement-form/
  2. Fill up the BOTD Forms and save the files as PDF.
  3. Upload your accomplished forms together with your Valid Government ID by following the instructions provided through this link: https://forms.gle/Y1MvBYBjxXkDvA4V7

Deadline for the submission of the BOTD Form is on March 31, 2021.

[1] SEC Memorandum Circular No. 1, Series of 2021 (MC 1-2021

[2] Republic Act No. 11232

[3] Sec. 3, MC 1-2021

[4] Sec. 4, ibid.

[5] Sec. 6, ibid.

[6] Sec. 7, ibid.

[7] Sec. 10, ibid.

[8] Sec. 8 and 17, ibid.


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