ARTA denies LYKA's appeal for automatic SEC registration

The Anti-Red Tape Authority (ARTA) has rejected the request of LYKA Philippines Solutions Inc. for the automatic approval of its application for company registration with the Securities and Exchange Commission (SEC).
In a notice of denial, the ARTA denied LYKA’s request for automatic approval of its application for registration with the SEC over the company’s failure to submit the complete documentary requirements.
LYKA President Michael Bryant T. Lim filed the request before the ARTA after noting that the Commission supposedly failed to act on its application for company registration, despite the submission of its articles of incorporation, by-laws, application to do business, and the corresponding incorporation fee, among others.
Republic Act No. 9485, as amended by Republic Act No. 11032, or the Ease of Doing Business and Efficient Government Service Delivery Act of 2018, provides that an original application or request for issuance of license, clearance, permit, certification or authorization shall be deemed approved if the concerned government agency fails to approve the same.
The ARTA, however, affirmed the Commission’s position that the automatic approval mandated by law did not apply to LYKA, given that entities under investigation are not covered by the reglementary period provided in the Ease of Doing Business Act, and that automatic approval is only applicable upon submission of complete requirements.
LYKA and its proposed major stockholder, Things I Like Company, Ltd., was issued a cease and desist order for violation Republic Act No. 11127, or the National Payment Systems Act, and is now suspended of possible money laundering.
Documents related to LYKA and its proposed major stockholder were indispensable to the Commission’s evaluation of the feasibility and sustainability of the company’s operation, in order to safeguard merchants, investors, and the shareholders of the company.
Further, LYKA failed to comply with a directive from the SEC Enforcement and Investor Protection Department (EIPD) requiring it to submit proof as to how the company finances its operation, list of merchants, list of payables, and a document disclosing the owners of GRL17 Nominee Limited, which appeared as the founding member of Things I Like Company, Ltd.
Clearance from the EIPD is one of the requirements for businesses engaged in the financial technology sector seeking to register with the SEC.
“However, [Lim] failed to show proof that it submitted a clearance from the [EIPD]. Accordingly, it cannot be said that there was submission of complete documentary requirements as stated in the Citizen’s Charter of SEC for Registration of Corporations through eSPARC,” the ARTA said in its resolution denying the request.
It added that, “Considering the foregoing, the requirements laid down under Section 10 of RA 9485, as amended, and its Implementing Rules and Regulations for Automatic Approval have not been met. Thus, Automatic Approval is not warranted in the instant application for registration of company submitted by LYKA with the SEC.”