4 April 2021

SEC SUBJECTS ALL FINANCING, LENDING FIRMS

TO ANTI-MONEY LAUNDERING RULES

The Securities and Exchange Commission (SEC) now requires all financing and
lending companies to register with the Anti-Money Laundering Council (AMLC), report
suspicious transactions and comply with other rules and standards aimed at
combating money laundering and terrorism financing in the country.

The Commission on March 30 issued SEC Memorandum Circular No. 4, Series of

2021 to amend 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 (MTTP).

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 (AMLA) and the Terrorism
Financing Prevention and Suppression Act (TFPSA).

Prior to the amendment, the SEC only required financing and lending companies with
more than 40% foreign participation in their voting stocks and those with paid-up
capital of at least P10 million to comply with the AMLA, the TFPSA and their
implementing rules and regulations (IRR).

“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 Chairperson Emilio B. Aquino said.

As covered persons, all financing and lending companies shall comply with all the
requirements under the AMLA, the TFPSA, their respective IRR, and other AMLC
issuances.

They shall also have the duty to cooperate with the AMLC in the discharge of the
latter’s mandate and in the execution of its lawful orders and issuances, to protect their
businesses from being used for money laundering or terrorism financing, as mandated
by the 2018 IRR of the AMLA.

To this end, 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

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Office of the Commission Secretary
S-309, 3F PICC Secretariat Building
Philippine International Convention Center (PICC) Complex
Pasay City
8888-8141;8818-5478
(AMLD-EIPD) within two months from the effective date of the newly issued
memorandum circular.

The SEC likewise directs all financing and lending companies to formulate and
implement a comprehensive and risk-based Money Laundering and Terrorist
Financing Prevention Program (MTTP), which must comply with the requirements of
the AMLA, TFPSA, their respective IRR, the 2018 AML/CFT Guidelines and other
AMLC issuances.

The MTTPs 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.

Accordingly, all financing and lending companies shall identify, assess and understand
the money laundering and terrorist financing risks to which they are exposed, in
accordance with the Guidelines in the Implementation of a Risk-based Approach to
Anti-Money Laundering/ Combating the Financing of Terrorism and Adoption and
Development of a Risk Rating System for SEC Covered Persons.

Those financing and lending companies, which have not yet submitted their MTTPs,
must submit both hard and soft copies to the AMLD-EIPD within two months from the
effective date of the memorandum circular.

The memorandum circular shall take effect 15 days after its publication in two national
newspapers of general circulation.

Failure to comply with the provisions of the newly issued memorandum circular will
subject the concerned financing or lending company to the penalties provided under
the 2018 AML/CFT Guidelines, which include a fine of P10,000 to P1 million, plus up
to P2,000 for each day of continuing violation.

END

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Office of the Commission Secretary
S-309, 3F PICC Secretariat Building
Philippine International Convention Center (PICC) Complex
Pasay City
8888-8141;8818-5478