SEC to tighten rules on beneficial ownership

The Securities and Exchange Commission (SEC) is set to introduce reforms for greater transparency in corporations’ beneficial ownership.

- By RICHMOND MERCURIO

To push for greater transparency, the SEC has issued a draft memorandum circular on the revised guidelines on beneficial ownership disclosure and transparency.

The draft guidelines aim to consolidate all the rules and regulations promulgated by the SEC pertaining to the identification, declaration and submission of accurate beneficial ownership information by all corporations registered with the commission.

The SEC said that the policy, developed in collaboration with Open Ownership and the United Nations Office on Drugs and Crime, aligns with the multi-pronged approach of the Financial Action Task Force to beneficial ownership disclosure.

It prohibits bearer shares, mandates disclosure of nominee arrangements and imposes proportionate sanctions for noncompliance and false declarations.

Among the reforms are requiring the disclosure of varying controls that owners exercise and expanding access to such information.

“By strengthening beneficial ownership information disclosure, we are addressing critical gaps that enable corruption and financial crime in the country, complementing broader government efforts to combat corruption and illicit financial activities,” SEC chairperson Francis Lim said.