MANILA, Philippines — The Securities and Exchange Commission (SEC), the corporate regulator, has issued new rules to promote good corporate governance and easy investing in the capital markets.
The new rules mandate exchanges to have more independent directors and seek to simplify onboarding procedures for customers in securities markets.
SEC chairperson Emilio Aquino said the new rules aim to encourage investors in the capital markets.
“A facilitative, but safe onboarding process for customers in securities markets would allow more Filipinos to participate in the ownership of enterprises and other investment opportunities to meet their financial goals,” Aquino said.
In an en banc meeting last week, the SEC approved the rules on simplified onboarding procedures for low risk accounts and the rules on the number of independent directors and sectoral representatives of exchanges and other organized markets.
The new rules shall apply to low risk accounts, or those opened and maintained by individual Filipino investors with an initial and subsequent deposit, investment or reinvestment amounting to an aggregate of not more than P50,000.
For low risk accounts, a regulated financial institution may limit the information and documents required of a prospective customer to his complete name, birthdate, email address, residential and business address, mobile and or landline number, source of income, a copy of a verifiable identification card or document with photo, and a signature card.
Furthermore, a customer may already open an account and commence a transaction upon providing the required information in writing, either digitally or through a physical medium.
However, regulated financial institutions shall continue implementing the necessary know-your-customer or customer due diligence measures to establish the true identity and existence of their customers before, during or after the opening of the account, but not later than 15 days from the date the account is opened, the SEC said.
A regulated financial institution may also prescribe other criteria and measures for account opening in addition to the minimum information required under the newly issued circular.
“Regulated FIs are likewise required to comply and institute the necessary measures to ensure compliance with the requirements on suitability and on prompt payment and delivery of obligations and other requirements under Republic Act 8799, or The Securities Regulation Code (src), and the 2015 src Rules that are not inconsistent with the new rules,” the SEC said.
Aside from these rules, the SEC also issued Memorandum Circular 20, Series of 2020 increasing the number of directors in an exchange.
The circular provides that independent directors shall constitute at least one-third of the members of the board of directors of exchanges and other organized markets.
Based on the best practices of major and comparable markets in many economies, the number of independent directors of their exchanges comprise a majority of the members of the board of directors, the SEC also said.