SEC pushes new rules on beneficial ownership disclosures
MANILA, Philippines — The Securities and Exchange Commission (SEC) wants to enforce strict rules on the disclosure of beneficial ownership, or those who own a controlling or substantial stake in a company. This would be part of efforts to prevent graft and corruption among Philippine corporations.
The corporate watchdog on Friday made public its proposed rules that requireå all companies registered with the SEC to disclose their beneficial owners. These refer to any natural person ultimately owning, controlling or exercising “ultimate effective control” over a corporation or legal entity.
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According to the SEC, establishing this regulatory framework would help prevent “misuse of corporate vehicles for illicit purposes, combat financial crimes and enhance transparency in public procurement processes.”
Required information
Under the proposed rules, all covered entities need to provide adequate, timely and accurate beneficial ownership information. These must be included in their general information sheet.
These include information for at least five years after the dissolution or termination of the entity, records of all changes in beneficial ownership for at least five years from the date of each change and supporting documentation.
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Companies also need to provide access to these records upon the request of the SEC.
Newly registered entities need to disclose beneficial ownership information at the time of incorporation, the SEC said. It added that this is required prior to the issuance of a certificate of incorporation or license to do business.
Existing entities, on the other hand, need to disclose this in their next general information sheet once the rules are effective.
The SEC likewise said it would prohibit the issuance, sale or offering of bearer shares and bearer share warrants. These are stocks owned by someone who is in possession of a stock certificate. /rwd
