ANTI-MONEY LAUNDERING MODEL OPERATING MANUAL FOR COVERED INSTITUTIONS

 

CHAPTER 1

INTRODUCTION

 

Section 1.1. The Securities and Exchange Commission (the Commission) hereby issues this Anti-Money Laundering Model Operating Manual for its Covered Institutions pursuant to the authority granted to it under the Anti-Money Laundering Act of 2001 (Republic Act No. 9160) and its regulatory and supervisory powers under the Securities Regulation Code, the Corporation Code, Presidential Decree 902-A, as amended, the Investment Houses Law, the Investment Company Act, the Financing Company Act and other pertinent laws, rules and regulations administered and enforced by the Commission.

Section 1.2.   Except as otherwise defined herein, all terms used shall have the same meaning as those terms are defined in the Anti-Money Laundering Act of 2001, Republic Act No. 9160, hereinafter referred to as the “Act”;

Section 1.3. The term “Regulated Intermediary/ Intermediaries” shall be used to refer to all Covered Institutions regulated by the Commission under the Securities Regulation Code, the Investment Houses Law, the Investment Company Act, the Financing Company Act, other laws and regulations implemented by the Commission and the Anti-Money Laundering Act of 2001. Regulated Intermediaries are, among others:

a.   Securities Brokers, Dealers and Salesmen, Associated Person of a Broker or Dealer

b.   Investment Houses and other similar entities managing securities or rendering services as Investment Agent, Advisor or Consultant

c.   Mutual Fund Companies, Closed-End Investment Companies

d.   Common Trust Fund Companies

e.   Pre-Need Companies

f.    Companies dealing in other valuable objects, cash substitutes and monetary instruments or property, supervised or regulated by the Commission

The following definitions shall apply to the foregoing:

“Securities Broker” is a person engaged in the business of buying and selling securities for the account of others;

“Securities Dealer” means any person who buys and sells securities for his/her own account in the ordinary course of business;

“Securities Salesman” is a natural person, employed as such or as an agent, by a dealer, issuer or broker to buy and sell securities;

“Associated person of a broker or dealer” is an employee thereof who, directly exercises control of supervisory authority, but does not include a salesman, or an agent or a person whose functions are solely clerical or ministerial;

 “Investment House” means any enterprise which engages or purports to engage, whether regularly or on an isolated basis, in the underwriting of securities of another person or enterprise, including securities of the Government and its instrumentalities; 

“Mutual Funds” or an open-end investment company is an investment company which is offering for sale or has outstanding, any redeemable security of which it is the issuer;

“Closed-end Investment Company” refers to an investment company other than open-end investment company;

“Common Trust Fund” refers to a fund maintained by an entity authorized to perform trust functions under a written and formally established plan, exclusively for the collective investment and reinvestment of certain money representing participation in the plan received by it in its capacity as trustee, for the purpose of administration, holding or management of such funds and/or properties for the use, benefit, or advantage of the trustor or of others known as beneficiaries;

“Pre-Need Company or Issuer” means any corporation authorized or licensed to sell or offer for sale pre-need plans. Pre-need plans are contracts which provide for the performance of future service(s) or payment of future monetary consideration at the time of actual need, payable either in cash, or installment by the planholder at prices stated in the contract with or without interest or insurance coverage and includes life, pension, education, internment and other plans, which the Commission may, from time to time, approve.

Investment Advisor/Agent/Consultant shall refer to any person:

(1)  who for an advisory fee is engaged in the business of advising others, either directly or through circulars, reports, publication or writings, as to the value of any security and as to the advisability of trading in any security or

(2)  who for compensation and as part of a regular business, issues or promulgates, analyzes reports concerning the capital market, except:

a)   any bank or trust company;

b)   any journalist, reporter, columnist, editor, lawyer, accountant or teacher;

c)   the publisher of any bonafide newspaper, news, business or financial publication of general and regular circulation, including their employees;

d)   any contract market;

e)   such other person not within the intent of this definition, provided that the furnishing of such service by the foregoing persons is solely incidental to the conduct of their business or profession.

(3)  any person who undertakes the management of portfolio securities of investment companies, including the arrangement of purchases, sales or exchange of securities.

“Money Payment, Remittance and Transfer Companies” mean those intermediaries who offer to pay or transmit money on behalf of any person to another person resident in another country.

Section 1.4.  The Commission, as the Supervising Authority over the Covered Institutions as enumerated under Section 3 (a)(3) of the Act, and where its supervision applies only to the incorporation of the Covered Institution, shall have the authority, within the limits of the Act, to require and ask assistance from the government agency having regulatory power and/or licensing authority over said covered institution for the implementation and enforcement of the Act and its Implementing Rules and Regulations.

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