Financing Companies and Lending Companies, regardless of equity participation and paid-up capital, are now covered under 2018 AML/CFT Guidelines
The Securities and Exchange Commission (“SEC”) has issued SEC Memorandum Circular No. 4, series of 2021 (“MC No. 4”) which amended the covered institutions in the 2018 Guidelines on Anti-Money-Laundering and Combating the Financing of Terrorism for SEC Covered Institutions (“2018 AML/CFT Guidelines”).
Section 1 of MC No. 4 amended Section 1.2 of the 2018 AML/CFT Guidelines and effectively removed the requirement that financing companies and lending companies must have more than 40% foreign participation or with paid-up capital of Php10 Million or more before it is treated as a covered institution.
Under the Circular, all financing companies and lending companies, regardless of their foreign equity or value of paid-up capital, shall now be covered under the 2018 AML/CFT Guidelines.
Following the inclusion of all financing companies and lending companies as covered persons under the 2018 AML/CFT Guidelines, MC No. 4 provides that all covered financing companies and lending companies shall:
- Register with the Anti-Money Laundering Councils’ (“AMLC”) online reporting system pursuant to the AMLC Registration and Reporting Guidelines.
Those not yet registered are given two (2) months from the effectivity of MC No. 4 to submit proof of registration to the Anti-Money Laundering Division of the Enforcement and Investor Protection Department of the SEC. [Sec. 2]
- Formulate and implement a comprehensive and risk-based Money laundering and Terrorist Financing Prevention Program (“MTTP”) in compliance with the Anti-Money Laundering Act and the Terrorist Financing Prevention and Suppression Act and their respective IRR and other AMLC issuances.
Those who have not submitted their MTTPs shall submit their respective MTTPs, in hard and soft copies and duly approved by the Board of Directors or by the country/regional/area head or its equivalent for local branches of foreign financing companies or lending companies, within two (2) months from the effectivity of MC No. 4. [Sec. 3]
Moreover, financing and lending companies shall be subject to the AML/CFT supervision of the SEC.
SEC reminds that non-compliance with the requirements under the Circular shall be subject to the penalties under the 2018 AML/CFT Guidelines.
MC No. 04 is now effective following its publication in the Manila Standard and Manila Times on 05 April 2021 and posting in the SEC website on 30 March 2021.