Five-Six Money Lenders Posted 20 October 2016

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SEC ADVISORY

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FIVE-SIX MONEY LENDERS

The SECURITIES AND EXCHANGE COMMISSION (“Commission”) has received reports that many individuals, particularly the “Five-Six Money Lenders”, engage in the business of lending without authority to do so in violation of the Lending Company Regulation Act of 2007.

Under the Lending Company Regulation Act of 2007, it is illegal to act as a lending company/investor unless registered with the Commission as lending company.  The said law mandates lending companies to organize only as corporations, making it illegal for individuals to engage in the business of lending without being registered as corporation with the Commission and secure the required Certificate of Authority.

Section 12 of the Lending Company Regulation Act of 2007 provides that a fine of not less than Ten Thousand Pesos (P10,000.00) and not more than Fifty Thousand Pesos (P50,000.00) or imprisonment of not less than six (6) months but not more that ten years or both, at the discretion of the court, shall be imposed upon:

1.  Any person who shall engage in the business of lending company without a validly subsisting authority to operate from the SEC;

2.  The president, treasurer and other officers of the corporation including the managing officer thereof who shall knowingly or willingly:

a.  Engage in the business of a lending company without a validly subsisting authority to operate from the SEC;

b.  Hold themselves out to be a lending company, either through advertisement in whatever form, whether it its stationary, commercial paper or other document, or through other representations without authority;

c.  Make use of trade name or firm name containing the words “lending company”or “lending investor” or any other designation that would give the public the impression that it is engaged in the business of a lending company as defined in this Act without authority; and

d.  Violate the provisions of this Act.xxx

Should you have any information regarding the individuals/entities engaging in lending business illegally, please call the Corporate Governance and Finance Department at telephone numbers 818-5476 or 818-5516 or report the same via the i-Message Mo of the Commission’s website:www.sec.gov.ph.

Mandaluyong City, Philippines.