SEC sets deadline for submission of anti-money laundering manuals

The Securities and Exchange Commission (SEC) has given financial intermediaries under its jurisdiction until Oct. 29 to submit their revised anti-money laundering operating manuals.

The SEC’s regulated intermediaries include stockbrokerage houses, investment houses, mutual funds, common trust fund companies and pre-need companies.

The revised manuals should take into account the new guidelines drafted by the SEC which incorporate amendments to the Anti-Money Laundering Act of 2001, international best practices and other securities rules.

Failure of a regulated intermediary to submit its revised operating manual shall lead to the imposition of a P500 penalty per day.

SEC Markets Regulation Department head Jose P. Aquino said each regulated intermediary must implement specific procedures for customer identification, record keeping and retention of transaction documents and reporting of covered and suspicious transactions.

Regulated intermediaries shall keep current and accurate all material information with respect to their customers by regularly conducting verification and update.

The customer identification program must also include procedures for providing customers with adequate notice that the regulated intermediary is requesting information to verify their identities.

Under the new guidelines, transactions involving a total amount in excess of P500,000 should be reported to the Anti-Money Laundering Council within one banking day.

Suspicious transaction reporting, on the other hand, must be done by the regulated intermediary within five working days from occurrence thereof.

Regulated intermediaries, however, shall file a suspicious transaction report before the AMLC, regardless of the amount of the transaction where any of the following circumstances exist:

• there is no underlying legal or trade obligation, purpose or economic justification;

• the client is not properly identified;

• the amount involved is not commensurate with the business or financial capacity of the client;

• taking into account all known circumstances, it may be perceived that the client’s transaction is structured in order to avoid being the subject of reporting requirements;

•any circumstance relating to the transaction which is observed to deviate from the profile of the client and/or the client’s past transactions;

• the transaction is in any way related to an unlawful activity or offense.