The Securities and Exchange Commission is seeking leeway from Congress to scrutinize bank records—given the strict bank deposit secrecy law in the Philippines—to be able to respond promptly when there are cases of securities violation.
In a briefing Friday, SEC Commissioner Ephryo Luis Amatong said the bank secrecy law had been an obstacle to the SEC’s acceptance to International Organization of Securities Commissions (Iosco), as Western investors were not familiar with such restrictions.
Iosco is an association of organizations that regulates world securities and futures markets.
The primary objective of Iosco is to encourage exchange of information but the Philippines is one of the countries with prohibitive bank secrecy laws.
“We’re proposing a bill to allow us to look into records when there’s securities violation,” Amatong said.
The leeway for the SEC could be done through an amendment to the Securities Regulation Code (SRC), Amatong said, ahead of other key amendments needed to update the securities regulation framework.
Amatong said that under the proposal, when there was allegation of securities fraud, the SEC could look into bank records, parallel to the Anti-Money Laundering Council (AMLC)’s own probe, without having to seek a court order. Once a proof is found, Amatong said that would be the time to freeze bank accounts.
“That seems to be the standard for everyone else,” Amatong said.
Seeking this legislative reform, Amatong said, would be a way to show the Philippines’ commitment to international standards that would facilitate easier flow of cross-border investments.
But within the Association of Southeast Asian Nations (Asean), Amatong said there were initiatives to facilitate better flow of cross-border investments that would include markets with deposit secrecy law.
“From the SEC perspective, we think there are really good opportunities here. We recently revised (SRC implementing) rules to make it easier for Filipino companies to issue and supporting initiatives for foreign investors to come in and for Filipino companies to raise outside,” he said.
The SEC en banc recently approved the 2015 SRC implementing rules, which among others, expands the shelf registration program, streamlines certain requirements on the public offering of debt or equity securities. The new rules also refine the tender offer requirements, which are sometimes contentious during corporate take-overs.