SEC moves to gain access to bank records

THE SECURITIES and Exchange Commission (SEC) is optimistic that the bank secrecy restriction under the Securities Regulation Code could be eased through legislation early during the next Congress so that the Philippines would be able to firm up its participation in the Asia Region Funds Passport.

An Asia-Pacific Economic Cooperation (Apec)-led initiative, the Asia Region Funds Passport is aimed at allowing financial services professionals to sell market investment products to retail customers in neighboring Asian countries.

Last September, the Philippines and five other Apec member-economies signed a statement of understanding for the Asia Region Funds Passport. The statement signified the intention of the Philippines, Australia, Japan, New Zealand, South Korea and Thailand to join the initiative when it goes in full swing late next year.

A memorandum of cooperation leading to the implementation of the Asia Region Funds Passport is targeted for signing by the respective securities regulators by year’s end. Signatories would be given 12 months to implement the passport arrangements domestically.

But the Philippines has yet to secure approval of its reapplication for Appendix A of the International Organization of Securities Commissions (IOSCO)—a requirement to implement the Asia Region Fund Passport initiative. IOSCO is an association of organizations that regulate the world’s securities and futures markets and whose primary objective is information sharing.

One roadblock to the Philippines’ IOSCO reapplication is bank secrecy restrictions.

SEC Chair Teresita J. Herbosa told reporters last week that the agency was now lobbying to amend the Securities Regulation Code so that it would have a provision allowing access to bank records when investigating securities fraud.