QAU Memo 2019-02 : SEC Updates
SEC Memorandum Circular No. 14, Series of 2018 Philippine Interpretation Committee Question and Answer (PIC Q&A) No. 2018-12 Implementation Issues Affecting Real Estate Industry The SEC has given the Real Estate Industry a relief by providing an option to defer (i.e. for a period of 3 years) the application of certain provisions of PIC Q&A No. 2018-12 with respect to accounting of the following:
Effective January 1, 2021, real estate companies will adopt PIC Q&A No. 2018-12 and any subsequent amendments thereof retrospectively or as the SEC will later prescribe. SEC Memorandum Circular No. 15, Series of 2018: Guidelines for the protection of SEC Registered Non-Profit Organizations from Money Laundering and Terrorist Financing Abuse (“NPO Guidelines”) The Commissionadopts these Guidelines to protect non-profit organizations from money laundering and terrorist financing abuse. The Commission adopts a risk-based approach in applying focused measures in dealing with threats of terrorist financing in order to ensure that NPOs are not being used by terrorist organizations. The risk based approach for the protection of NPOs shall include the following: 1. Identify threats based on the results of assessment of AMLC. 2. Identify vulnerabilities among NPOs based on their type and features. 3. Identify the consequences of such threats and vulnerabilities on NPOs. The levels of risk, together with their corresponding compliance requirements are as follows:
Mandatory Disclosures for All SEC Registered Non-stock Corporations All SEC registered Non-stock Corporations shall, within 6 months from effectivity of this guideline, submit an additional disclosure of information listed in Annex A of this guideline to the Commission through the respective Operating Departments having supervision over such Non-Stock Corporations copy furnished the Anti-Money Laundering Division (AMLD) of the Enforcement and Investor Protection Department (EIPD). Failure to comply with the requirements of this Chapter is a cause for revocation of the registration of the non-complying non-Stock Corporation. Penalties If, after due notice and hearing, the Commission finds that: a) There is wilful violation of these Guidelines or related orders of the Commission; b) Any person has, in applications, accounts, records or documents required under these Guidelines to be filed with the Commission, made any untrue statement of a material fact required to be stated or necessary to make the statements therein not misleading; or c) Any person has refused to permit any lawful examinations into its affairs, The Commission may, in its discretion, and subject to existing laws and regulations, impose any or all of the following sanctions as may be appropriate in light of facts and circumstances:
SEC Memorandum Circular No. 16, Series of 2018: 2018 Guidelines on Anti-Money Laundering and Combating the Financing of Terrorism for SEC covered Institutions (“2018 AML/CFT Guidelines”) All Covered institutions as defined in the 2018 AML/CFT Guidelines are required to amend their MLPP (Money Laundering and Terrorist Financing Prevention Program) to conform to 2018 AML/CFT Guidelines.
Money Laundering and Terrorist Financing Prevention Program All Covered institutions are required to adopt a comprehensive and risk-based Money Laundering and Terrorist Financing Prevention Program (MLPP) geared toward the promotion of high ethical and professional standards and the prevention of the Covered Institutions from being used, intentionally or unintentionally, for money laundering and terrorism financing. The program shall embody the following at a minimum: 1) Detailed procedures of the covered institution’s compliance and implementation of the following major requirements of the AMLA, as amended, its RIRR, other applicable guidelines issued by the AMLC and these guidelines, to wit: a) Customer Identification Process; b) Record keeping and retention; c) Covered Transaction Reporting; and d) Suspicious transactions reporting 2) An effective and continuous AML/CFT training program for all directors, and responsible officers and employees 3) An adequate screening and recruitment process 4) An internal audit system 5) An independent audit program with written scope of audit 6) A mechanism that ensures all deficiencies noted during the audit and/or SEC regular or special examination or other applicable regulator’s examination are immediately corrected and acted upon; 7) Cooperation with the AMLC; 8) Designation of an AML Compliance Officer 9) A mechanism where information required for customer due diligence and ML/TF risk management are accessible by the parent covered institution 10) Policies and control procedures and monitoring mechanism for prevention or mitigation of ML/TF risks. Sanctions and Penalties Any violation of the requirements set forth in these guidelines shall be considered as a violation of the Rules, Regulations or Orders promulgated by the Commission, and shall be penalized in accordance with Section 54.1 (a) in relation to Section 54.1 (a)(i),(ii) and (v) of the Securities Regulations Code without prejudice to the penalties that may be imposed by the AMLC RIRR. Accordingly, the Commission may impose any or all of the following sanctions as may be appropriate in the light of facts and circumstances:
SEC Memorandum Circular No. 17, Series of 2018: Revision of the General Information Sheet (GIS) to Include Beneficial Ownership Information The SEC issued this Circular to assist in the implementation of the Anti-Money Laundering Act, as amended; ensure timely access to adequate, accurate and current information on the beneficial ownership and control of SEC registered corporations; and prevent their misuse for money laundering and terrorist financing purposes. Beneficial Owner refers to any natural person who ultimately owns and controls the corporation or has ultimate effective control over the corporation. Ultimate Effective Control refers to any situation in which ownership/control is exercised through actual or through a chain of ownership. All SEC registered corporations are required to disclose their beneficial owners. Accordingly, the GIS shall be revised to include the following information of the beneficial owners. a) Complete name which shall include the surname, given name, middle name and name extension; b) Specific residential address; c) Nationality; d) Tax identification number; and e) Percentage of ownership, if applicable. This requirement shall be initially complied with beginning January 1, 2019. The SEC shall be timely apprised of all relevant changes in the submitted beneficial ownership information contained in the GIS as they arise. An updated GIS shall be submitted to the SEC within seven (7) days after such change occurred or became effective.
SEC Opinion No. 18-24: Nationality Requirement of Third Telco The SEC rendered an opinion on whether the binding Bidding Agreement dated November 6, 2018 entered into by Udenna Corporation, Chelsea Logistics Holdings Corp., China Telecommunications Corporation and Mindanao Islamic Telephone Company, Inc. comply with the relevant rules on foreign ownership applicable to the telecommunications business. This is in connection with the requirement under Section 10.1 (b) of NTC Memorandum Circular 09-09-2018 or the Rules and Regulations on the Selection Process for a New Major Player (NMP) in the Philippine Telecommunications Market (NTC Bidding Rules) which states that Compliance by NMP of Paid Capital of at least P10 Billion and implementation of the relevant provisions of the Bidding Agreement, if applicable to a Participant which has been selected as NMP, accompanied by an SEC Clearance that the terms of the Bidding Agreement comply with the relevant rules on the limitation of foreign equity ownership. It was further disclosed that Mislatel was recently declared and confirmed by the National Telecommunications Commission (NTC) as the NMP of the Philippine Telecommunications Market. Upon the increase in MISLATEL’S capitalization, MISLATEL will be compliant with the capitalization requirements of NMP, which is currently set at PESOS : TEN BILLION (Php 10,000,000,000.00) Public Utilities were placed under List A, Item 18 of the 11th Foreign Investment Negative List, where in only up to 40% foreign equity is allowed. Upon assessment, Mislatel also complied with the relevant rules on the limitation of Foreign equity ownership. |
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QAU Memo is the official publication of R.S. Bernaldo & Associates to keep the Firm’s professional staff informed of the issues affecting the practice. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. The Firm cannot be held liable for any losses suffered as a result of reliance upon information contained in this memo. This is a property of R.S. Bernaldo & Associates. Reproduction of any material included in the memo should be subject to the approval of the Editorial Board. R.S. Bernaldo & Associates is a member firm of the PKF International Limited family of legally independent firms and does not accept any responsibility or liability for the actions or inactions of any individual member or correspondent firm or firms. Comments and suggestions are welcome. |
Editorial Board
Partner | Quality and Compliance/ Training Partner rose [dot] bernaldo [at] rsbernaldo [dot] com
Quality Assurance Senior Manager/ Quality Assurance Leader anthony [dot] pano [at] rsbernaldo [dot] com
Quality Assurance Associate/ Engagement Quality Control Review Leader qau [at] rsbernaldo [dot] com
Quality Assurance Associate/ Consultation Leader qau [at] rsbernaldo [dot] com
Quality Assurance Associate/ Learning and Training Leader qau [at] rsbernaldo [dot] com
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