SEC issues guidelines on non-profit organizations

MANILA, Philippines — The Securities and Exchange Commission has issued new guidelines for non-profit organizations.

Under the new guidelines issued by the SEC, non-profit organizations will be subject to heightened monitoring to protect them from money laundering and terrorist financing abuse.

In particular, the SEC now undertakes the task of identifying non-profit organizations that are “at risk and have vulnerabilities.”

These organizations will be assessed as either “low risk,” “medium risk,” “high risk,” and “blacklisted.”

At risk non-profit organizations will be subject to “enhanced monitoring,” the scope of which is unknown and rests fully on the SEC to determine.

The SEC also requires mandatory disclosures of information such as submitting a full list of donors.

A group of lawyers, however, hit the new SEC memorandum, saying that some of the information now required by the SEC are not required disclosures under the Corporation Code.

“Any information gathered by the SEC under the guidelines is subject to sharing with law enforcement and other agencies of the government. Worse, the SEC is empowered to perform virtually any act necessary to conduct investigations of violations (not only those consummated but also those about to be committed), such as the power to subpoena witnesses, compel attendance, take evidence, and even enlist the aid and deputize all enforcement agencies — civil and military,” the National Union of Peoples’ Lawyers said.

The lawyers’ group said the SEC memo threatens the existence of non-profit organizations and disrupts their advocacies.

“It will be instrumental in violating the fundamental freedoms of individual members, especially those who have been maliciously tagged as part of “communist fronts,” subjecting them to surveillance, harassment and other rights violations, and constricting civic space,” the group said.

However, the SEC said the new rules are meant to protect non-profit organizations from terrorist financing.

It also said the new rules do not aim to disrupt non-profit organizations’ charitable activities and other cause oriented activities.