Foreign firms told to disclose beneficial ownership

THE Securities and Exchange Commission (SEC) is requiring foreign corporations to disclose beneficial ownership information, as part of the government’s efforts to stop money laundering and terrorist financing.

In SEC Memorandum Circular No. 30 uploaded on its website on Tuesday, the regulator said all SEC registered foreign corporations, both stock and nonstock, will be required to update their general information sheets (GIS) with information on beneficial owners.

A beneficial owner refers to any person that “ultimately owns or controls or exercises ultimate effective control” over a corporation. This would include people that “actually own or control the corporation as distinguished from the legal owners.”

The SEC said beneficial owners may be persons that own, directly or indirectly, at least 25% of the voting rights or capital of a corporation.

It also includes those that exercise control over a corporation, whether alone or with others, and have dominant influence over the management or its policies.

Persons that have the ability to elect a majority of the board of directors, or own the corporation through nominee shareholders or directors, are likewise classified as beneficial owners.

Also covered are persons that have ultimate effective control through other means, such as acting as stewards of corporate properties and having their instructions or wishes carried out by the majority of the board of directors.

The SEC said foreign corporations need to submit information on beneficial owners such as  identification documents, specifically their complete name, specific residential address, birthdate, nationality, tax identification number, and if applicable, percentage of ownership.

Foreign corporations must submit this through a Beneficial Ownership Declaration Page that will now be included in the GIS and a notification update form.

“The SEC shall be timely apprised of all relevant changes in the submitted beneficial ownership information as they arise. Such change shall be indicated in the Notification Update Form and shall be submitted to the SEC within 30 days after such change occurred or became effective,” it said.

The circular takes effect immediately after publication in two national newspapers and posting on the SEC website. The rules will apply for the GIS to be submitted by foreign corporations in 2021.

The SEC said the memorandum circular was issued as part of its mandate to assist in the implementation of the Republic Act No. 9160 or the Anti-Money Laundering Act of 2001 and Republic Act No. 101168 or Terrorist Financing Prevention and Suppression Act of 2012. — Denise A. Valdez