SEC issues rules to shield non-profit organizations from money laundering

The Securities and Exchange Commission said it finalized the guidelines to protect non-profit organizations from money laundering and terrorist financing abuse.

The SEC issued Memorandum Circular No. 25 on Dec. 27 requiring NPOs to make publicly accessible online, accurate, current and complete information regarding their status, finances, expenses, projects, activities and those who control such activities and their beneficial owners.

It said the requirement would promote transparency and maintain public trust in NPOs.

The corporate regulator said that to promote accountability, the board of directors of NPOs would be required to conduct due diligence on individuals and organizations that donate money or funds to their group.

NPOs are also required to keep financial records of income, expenses and financial transactions throughout their operations. They are also required to maintain, for a period of at least five years, detailed records of domestic and international transactions to ensure that funds were received and spent in a manner consistent with the purpose and objectives of the organization.

MC 25 also empowered the SEC to conduct investigation as it may deem necessary to determine whether any person had violated or is about to violate the mandatory provisions of the guidelines or any NPO was being used for money laundering or terrorist financing.

The SEC also required non-stock corporations to submit the mandatory disclosure form until 30 days after the issuance of the new guidelines.

A mandatory disclosure form will contain information about non-stock corporation’s area of operations, beneficial owners, nature of operations, actual raising and disabusing of funds, source of funds, intended beneficiaries and other material information.

“Failure to comply with the requirements is a cause of revocation of certificate of incorporation of a non-complying non-stock corporation,” the SEC said.

It said NPOs found to be violating these guidelines would be subject to penalties including fine of up to P1 million, revocation of registration and other penalties with the power of the commission.

Topics: Securities and Exchange Commission , SEC , non-profit organizations , money laundering , terrorist financing abuse
COMMENT DISCLAIMER: Reader comments posted on this Web site are not in any way endorsed by Manila Standard. Comments are views by readers who exercise their right to free expression and they do not necessarily represent or reflect the position or viewpoint of While reserving this publication’s right to delete comments that are deemed offensive, indecent or inconsistent with Manila Standard editorial standards, Manila Standard may not be held liable for any false information posted by readers in this comments section.
AdvertisementGMA-Working Pillars of the House