Printer Friendly

SEC seeks authority to access bank records.

The Securities and Exchange Commission (SEC) has appealed to Congress for authority to access and scrutinize bank records as needed to boost investor protection, prevent scams and improve cross-border coordination on securities regulation.

In a speech delivered during the Financial Executives Institute of the Philippines (Finex) conference last Friday, SEC Chair Teresita Herbosa said the existence of the local bank secrecy law and the Philippines' status as a nonsignatory to the multilateral memorandum of understanding (MMOU) adopted by the International Organization of Securities Commissions (IOSCO) were preventing the country from joining a number of regional initiatives involving the capital markets in the region.

'Thus, it is not expected that the SEC can consistently maintain the integrity of our capital markets nor totally eliminate insider trading, market manipulation, fraudulent representations in financial and nonfinancial reporting, investment scams and the like,' Herbosa said. 'In other words, the Philippines cannot break its domestic barriers to competitiveness in the regional or global financial arena.'

Since the general rule is that all bank accounts-in pesos or foreign currencies-are confidential, Herbosa lamented that the SEC could not effectively and expeditiously conduct investigations of securities law violations. The SEC is also prevented from sharing bank records and financial information with its foreign counterparts conducting their own investigations of securities law or similar violations.

'Where countries are financially connected to each other, so are criminals such as investment scammers, Ponzi schemers, market manipulators, tax evaders, corrupt politicians and money launderers,' Herbosa said.

IOSCO requires that for a country to be able to sign the MMOU, the SEC itself must be empowered by law to directly access bank records and information, provide bank records upon request of a foreign regulator, allow the use of bank records in administrative, civil and criminal proceedings, issue subpoena to directly obtain bank records when probing securities law violations and obtain information from bank officer or employees or any person necessary for the investigation.

The SEC had attempted to sign the MMOU twice but both were denied by IOSCO.

The SEC chief knows how difficult it is to gain support to repeal the bank secrecy law. Related proposals have not taken off even when this became a hot issue at the height of the $81-million cyberheist that involved the Jupiter branch of RCBC last year.

'Thus, the SEC is constrained to resort to the only option left-propose to the Philippine Congress soonest the relevant amendments to the SRC (Securities Regulation Code) such that the SEC would be empowered as required under the MMOU,' Herbosa said.

If Congress would pass such amendment to the SRC, Herbosa said there would be a more effective and efficient conduct of investigations for securities law violations. She added that the SEC would then be able to facilitate the repatriation of assets that have been illegally transferred abroad.

Among other benefits would be the promotion of financial services, including money transfers of overseas Filipino workers and international financial flows, she said.

Without such SRC amendments, Herbosa said the Philippines would miss out on Association of Southeast Asian Nation (Asean) integration initiatives, particularly those concerning the capital markets and cross-border transactions involving sale of securities and foreign direct investments.

'The Philippines will experience impaired international relations due to nonfulfillment of international commitment as an Asean member country,' Herbosa said, adding that the country would be perceived as an uncooperative jurisdiction.

Furthermore, Herbosa warned that the proliferation of illegal financial activities would be possible alongside greater risks to overseas Filipino remittances.
COPYRIGHT 2017 Asianet-Pakistan
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2017 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:Philippines Daily Inquirer (Makati City, Philippines)
Geographic Code:9PHIL
Date:Oct 16, 2017
Words:642
Previous Article:PSEi seen testing new highs.
Next Article:$170-M WB loan sought for PH agri project.
Topics:

Terms of use | Privacy policy | Copyright © 2019 Farlex, Inc. | Feedback | For webmasters