The Securities and Exchange Commission said a group of dealers and brokers opposed its campaign against money laundering.
SEC said while it undertook measures to strengthen anti-money laundering campaign under the newly enforced implementing rules and regulations of the Securities Regulation Code, the Philippine Association of Brokers and Dealers Inc. moved to block its implementation.
The regulator said it was unable to implement these measures because of the case filed by PASBDI against the new provisions of the SRC IRR, which took effect in November 2015.
The campaign against anti-money laundering suffered a setback following reports that some $81 million worth of funds under the Bangladesh’s central bank account at New York Federal Reserve was illegally transferred to Philippine banks and casinos in February.
The government is now under pressure to toughen its anti-money laundering campaign so as not to be blacklisted as a money laundering haven.
PABSI earlier asked a Mandaluyong City regional trial court to invalidate the 2015 SRC IRR requiring disclosure of beneficial owners of shares of stocks. SEC said the amendment would boost efforts against money laundering.
SEC commission secretary Armando Pan said while the temporary restraining order stopping the SEC from enforcing some of the provisions on the amended IRR already expired last week, the case remained on status quo.
A hearing still had to be conducted on the writ of preliminary injunction filed by PASBDI.
Pan said SEC wanted to implement eight new provisions in the IRR that would enhance the anti-money laundering measures. Six provisions were being opposed by PASBDI.
These included provisions prohibiting brokers from maintaining numbered accounts for trading and investment purposes of their client or their own, provision requiring brokers from creating new accounts without face-to-face meeting and provisions on maintaining for each account the essential information about their customers.
The amended IRR also required brokers to file all Anti-Money Laundering Act resolutions, to have websites showing the names, current photos and contact details of its directors, principal officers, associated persons and salesman, and to conduct effective surveillance and investigation by requiring brokers to provide the regulator regular access to particular accounts
PASBDI sought to invalidate certain provisions of the 2015 SRC IRR including amendments introduced to increase transparency in the dealings of brokers and dealers, comply with anti-money laundering laws and promote investor protection.
PASBDI opposed the requirement that brokers and dealers should provide the SEC with a comprehensive information technology plan, business continuity, disaster recovery plan, risk management manual and internal control procedures as a pre-requisite for registration.
