Securities and Exchange Commission (SEC) Headquarters in Makati. | PHOTO: Daniella Agacer / INQUIRER.net
The Securities and Exchange Commission (SEC) is pushing for more transparency reforms in the country and across Southeast Asia, particularly through disclosures of beneficial ownership data, to promote “financial integrity” and combat corruption.
The corporate watchdog said in a statement that it had already made “significant progress” in implementing its beneficial ownership policies, as these resulted in a “marked increase” in compliance rates among companies—around 70 percent from only 30 percent five years ago.
“As businesses increasingly operate across borders, understanding and implementing robust [beneficial ownership] frameworks will become essential for compliance and risk management,” the SEC said on Tuesday.
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Beneficial ownership refers to a person or entity that owns or controls a company, although their names are often not stated in official documents. They are also usually the ones who get the most gains from the company’s finances.
The SEC’s call came after it promoted its policies at a recent anticorruption and transparency event in Indonesia.
The regulator previously worked with the United Nations Office on Drugs and Crime to improve the process of disclosing beneficial ownership data among companies in the Philippines.
In 2019 and 2020, the SEC likewise mandated the declaration of beneficial ownership data in the general information sheets of domestic and foreign corporations.
Issuance of bearer shares was also prohibited to “enhance transparency.”
Bearer shares refer to stocks owned by someone who is in possession—the bearer—the stock certificate. These can make it difficult to properly track the rightful owner of shares, as ownership can be transferred by delivering the certificate to the buyer.
The commission also called on regional cooperation to help prevent corruption among companies.
“The SEC remains committed to supporting these efforts, recognizing that regional cooperation is crucial to achieving sustainable progress in the fight against the misuse of corporations for crimes,” it said. INQ