The Philippine Securities and Exchange Commission (SEC) has issued SEC Memorandum Circular No. 15, Series of 2019, on the amendments to SEC Memorandum Circular No. 17, Series of 2018 on the revision of the General Information Sheet (GIS) to include Beneficial Ownership Information.
The circular was issued pursuant to the SEC’s mandate to assist in the implementation of the Anti-Money Laundering Act (AMLA) and the Terrorist Financing Prevention and Suppression Act (TFPSA). This is to ensure timely access to adequate, accurate and current information on the beneficial ownership and control of SEC-registered corporation by competent authorities.
What’s Beneficial Ownership and Owners
The term “beneficial owner” refers to any natural person(s) who ultimately own(s) or control(s) or exercise(s) ultimate effective control over the reporting corporation. This definition covers natural person(s) who actually own or control the corporation as distinguished from the legal owners.
The following will need to be reported of such beneficial owner in the Beneficial Ownership Declaration page to be attached to the General Information Sheet:
- complete name
- specific residential address
- date of birth
- tax identification number (TIN), and
- percentage of ownership, if applicable
Such information shall not be uploaded to the SEC’s publicly accessible electronic database but shall be accessible to competent authorities for law enforcement and other lawful purposes.
How is beneficial ownership determined?
Beneficial ownership shall be determined as follows:
- The identity of the natural person(s) who ultimately has controlling ownership in the corporation. For this purpose, any natural person owning at least 25% (shares or voting rights) of the corporation shall be considered as a beneficial owner.
- The identity of the natural persons (if any) exercising control of the corporation through other means.
- The identity of the natural persons composing the Board of Directors/Trustees or any similar body and/or the senior management official of the reporting corporation.
Under the circular, beneficial ownership shall be determined on the basis of the following:
|A||Natural person(s) owning, directly or indirectly or through a chain of ownership, at least twenty-five percent (25%) of the voting rights, voting shares or capital of the reporting corporation.|
|B||Natural person(s) who exercise control over the reporting corporation, alone or together with others, through any contract, understanding, relationship, intermediary or tiered entity.|
|C||Natural person(s) having the ability to elect a majority of the board of directors or trustees of the reporting corporation.|
|D||Natural person(s) having the ability to exert a dominant influence over the management or policies of the reporting corporation.|
|E||Natural person(s) whose directions, instructions or wishes in conducting the affairs of the corporation are carried out by majority of the members of the board of directors of such corporation who are accustomed or under an obligation to act in accordance with such person’s directions, instructions or wishes.|
|F||Natural person(s) acting as stewards of the properties of the corporation, where such properties are under the care or administration of said natural person(s).|
|G||Natural person(s) who actually own or control the reporting corporation through nominee shareholders or nominee directors acting for or on behalf of such natural persons.|
|H||Natural person(s) ultimately owning or controlling or exercising ultimate effective control over the corporation through other means not falling under any of the foregoing categories.|
|I||Natural person(s) exercising control through positions held within a corporation (under exceptional cases where no natural person is identifiable as the beneficial owner, where the reporting corporation has exhausted all reasonable means of identifying such beneficial owner).|
In short, any beneficial ownership by a natural person, whether directly or indirectly, of at least twenty five percent (25% ) of the reporting corporation will need to be reported to the SEC. Moreover, the directors/ trustees and officers of the reporting corporation are required to exercise due diligence in ensuring that the requirement to disclose the beneficial owner in the General Information Sheet is complied with.
This circular applies to all SEC registered stock and non-stock domestic corporations required to submit a GIS and will apply to all GIS filings beginning 31 July 2019.
Sworn statement of the Corporate Secretary
The updated General Information Sheet is required to be accompanied by a sworn statement, which is incorporated in the updated template, by the corporate secretary that reads as follows:
I, _______________________________, Corporate Secretary of ________________________________ declare under penalty of perjury that all matters set forth in this GIS have been made in good faith, duly verified by me and to the best of my knowledge and belief are true and correct.
I hereby attest that all the information in this GIS are being submitted in compliance with the rules and regulations of the Securities and Exchange Commission (SEC) the collection, processing, storage and sharing of said information being necessary to carry out the functions of public authority for the performance of the constitutionally and statutorily mandated functions of the SEC as a regulatory agency.
I further attest that I have been authorized by the Board of Directors/Trustees to file this GIS with the SEC. I understand that the Commission may place the corporation under delinquent status for failure to submit the reportorial requirements three (3) times, consecutively or intermittently, within a period of five (5) years (Section 177, RA No. 11232 ).
Done this day of _____, 20 _ in _____________________.
(Signature over printed name)
SUBSCRIBED AND SWORN TO before me in ___________ on ________ by affiant who personally appeared before me and exhibited to me his/her competent evidence of identity consisting of _________ issued at _ on ________.