SEC: All lending firms must register with AMLC

Published April 5, 2021, 7:00 AM

by James A. Loyola

All financing and lending companies are now required by the Securities and Exchange Commission (SEC) to register with the Anti-Money Laundering Council (AMLC).

These firms are also directed to report suspicious transactions and comply with other rules and standards aimed at combating money laundering and terrorism financing in the country. 

The Commission has issued a Memorandum Circular to amend the SEC Guidelines on Anti-Money Laundering and Combating the Financing of Terrorism for SEC Covered Institutions and the 2020 Guidelines on the Submission and Monitoring of the Money Laundering and Terrorist Prevention Program (MTTP).

The amendment adds all financing and lending companies among the SEC-supervised covered persons, or those required to comply with the requirements and standards provided under the Anti-Money Laundering Act (AMLA) and the Terrorism Financing Prevention and Suppression Act (TFPSA). 

Prior to the amendment, the SEC only required financing and lending companies with more than 40 percent foreign participation in their voting stocks and those with paid-up capital of at least P10 million to comply with the AMLA, the TFPSA and their implementing rules and regulations (IRR). 

“The amendment aims to protect financing and lending companies from abuse and misuse by money launders and terrorists, and more importantly the integrity of the financial system, the overall economy and the people who would ultimately suffer from such illicit activities,” SEC Chairperson Emilio B. Aquino said. 

As covered persons, all financing and lending companies shall comply with all the requirements under the AMLA, the TFPSA, their respective IRR, and other AMLC issuances. 

They shall also have the duty to cooperate with the AMLC in the discharge of the latter’s mandate and in the execution of its lawful orders and issuances, to protect their businesses from being used for money laundering or terrorism financing, as mandated by the 2018 IRR of the AMLA.

Thus, all financing and lending companies must register in the online reporting system of the AMLC and submit proof of such registration to the Anti-Money Laundering Division of the SEC Enforcement and Investor Protection Department (AMLD-EIPD) within two months from the effective date of the newly issued memorandum circular.

The SEC also directs all financing and lending companies to formulate and implement a comprehensive and risk-based MTTP, which must comply with the requirements of the AMLA, TFPSA, their respective IRR, the 2018 AML/CFT Guidelines and other AMLC issuances.

Failure to comply with the provisions of the newly issued memorandum circular will subject the concerned financing or lending company to the penalties provided under the 2018 AML/CFT Guidelines, which include a fine of P10,000 to P1 million, plus up to P2,000 for each day of continuing violation.