Beginning 29 January 2021, all nominee directors, trustees or shareholders, incorporators or applicants for incorporation, and all concerned corporations subject to the supervision and jurisdiction of the Securities and Exchange Commission ("SEC") shall comply with the guidelines provided in SEC Memorandum Circular No. 1, series of 2021, or the Beneficial Ownership Transparency Guidelines ("Guidelines"). These were issued to promote transparency of beneficial ownership and prevent the misuse of corporations for illicit activities.
Under the Guidelines, a "nominee" is a natural person who acts for and on behalf of another person as an incorporator, director, trustee or stockholder. A nominee director, trustee, or stockholder, as well as an incorporator or applicant for incorporation, will be required to disclose the identities of its principal/s or person/s on whose behalf he or she is acting. As such, a nominee must submit the following disclosure forms: (i) Beneficial Ownership Transparency Declaration Form, and (ii) Consent Agreement Form. These must be uploaded in the online form set up by SEC. Nominees are given until 31 May 2021 to submit the disclosure forms.
The Guidelines prohibit the issuance, sale, or offer for sale or distribution of bearer shares and bearer share warrants. Bearer shares are defined as (i) equity securities owned by the person or entity that holds the physical certificate which enables the transfer of ownership of shares of stock by mere delivery of such certificate, and (ii) instruments that accord ownership in a juridical person to the person or entity who possesses it or is the holder of the bearer share certificate. Bearer share warrants are defined as documents certifying that the bearer is entitled to a certain amount of the fully paid shares of stock of a corporation.
The Guidelines also provide that the alienation, sale, or transfer of shares of stock (except for shares of stock of publicly-listed companies traded over the facilities of the Philippine Stock Exchange), the date thereof, by whom and to whom made, shall be disclosed and recorded in the Stock and Transfer Book of the issuing corporation within 30 days from date of such alienation, sale, or transfer subject to compliance with the requirements for the recording or registration of transfers under applicable regulations.
Violation of these guidelines may result to administrative and criminal sanctions.
