The Philippines is applying to be part of the IOSCO (International Organization for Securities Commission). It is an association of corporate regulators that manages the securities and future markets globally. And because of this, the Securities Exchange Commission seeks to amend the Securities Regulation Code (SRC). SEC wants to have the power to access bank records when investigating fraud cases.
SEC chairman Teresita Herbosa said that there is a need to amend the Securities Regulation Code. Herbosa explained, “… there are already provisions there that would aid us to investigate securities fraud and you’ve seen that also in our handling of matters involving investment scams. But in order to fully make it more expeditious, we really have to have access to bank records.”
Section 2 of the Republic Act 1405 or the law on secrecy of bank deposits states that “All deposits of whatever nature with banks or banking institutions in the Philippines including investments in bonds issued by the government of the Philippines, its subdivisions and its instrumentalities are hereby considered as of an absolutely confidential nature and may not be examined, inquired of looked into by any person, govt. official, bureau or office except upon written permission of the depositor or in case of impeachment or upon order of a competent court in cases of bribery or dereliction of duty of public officials or in cases where the money deposited or invested is the subject matter of the litigation.”
“This time we really might need legislation and that would consist of lifting the Bank Secrecy Law in the aspect of securities violations, so when we investigate the securities fraud, we must be able to access bank records.” she said.
Herbosa told reporters last week that this proposal was already sent to congress and she hopes that it will be done before the President’s term ends in 2016.
She also said by relaxing the bank secrecy law, the BIR will also benefit from this as they would be able to investigate hidden taxable deposits.
“The IOSCO requirement is really on information sharing. It is something like a country outside is doing an investigation, and they would like information from us. What if that information is concerning a bank account here but you cannot access it? That also prevents us from asking their help because how will they help us if we don’t help them,” she further explained.
She said that the next IOSCO meeting will be in March and once they file for an amendment of the SRC, they (Iosco) will take that as a full-fledged commitment.
IOSCO was established in 1983, its membership regulates more than 95percent of the world’s securities markets in more than 115 jurisdictions.