SEC: Strong beneficial ownership policies needed to prevent corporate misuse

STRONG beneficial ownership policies are essential to prevent the misuse of corporate structures for illegal activities, according to the Securities and Exchange Commission (SEC).

“As businesses increasingly operate across borders, understanding and implementing robust beneficial ownership policies frameworks will become essential for compliance and risk management,” the SEC said in an e-mailed statement.

According to the SEC, the Philippines has made “significant progress” in implementing beneficial ownership policies.

These include requiring the declaration of beneficial ownership in the general information sheets of corporations, barring the issuance of bearer shares to enhance transparency, and launching an amnesty program last year to improve compliance.

The commission added that it has domestic and international efforts to promote best practices in beneficial ownership transparency.

The SEC has signed data-sharing agreements with law enforcement agencies such as the Government Procurement and Policy Board, the Bureau of Internal Revenue, and other law enforcement agencies.

Provisions for beneficial ownership transparency have also been included in the newly enacted Republic Act 12009 or the New Government Procurement Act signed in July 2024.

“The SEC remains committed to supporting these efforts, recognizing that regional cooperation is crucial to achieving sustainable progress in the fight against the misuse of corporations for crimes,” it said.

The SEC said this as it sent representatives to the Regional Peer Exchange on Advancing Anti-Corruption Efforts through Beneficial Ownership Transparency in Jakarta, Indonesia on Aug. 12-15.

The event was organized by the United Nations Office on Drugs and Crime and Open Ownership. It gathered representatives from Southeast Asia to discuss the role of beneficial ownership transparency in encouraging financial integrity and fighting corruption.

The SEC said the peer exchange highlighted the increasing importance of beneficial ownership transparency as a tool for businesses and governments, as well as the growing need to identify the individuals who ultimately own or control companies to prevent the misuse of corporate structures for illicit activities.

“The discussions underscored the need for Southeast Asian nations to recognize beneficial ownership transparency as a growing practice and its importance in fostering a culture of transparency and accountability in business operations,” the SEC said. — Revin Mikhael D. Ochave