Financing And Lending Firms Under Close Watch By SEC
Financing and lending companies will be provisioned by tighter rules by the Security Exchange Commissions (SEC), especially in the way they advertise their services. SEC has taken notice of the proliferation of online trading platforms such as websites and mobile applications that operate online.
According to SEC they are hoping to issue a circular within the next two weeks which will require financing and lending companies to fully disclose their corporate names, registration number, and certificate of authority to operate a financing and lending company. In addition, these companies will also be required to provide an advisory to their prospective borrowers to study the terms and conditions in the disclosure statement before proceeding with the loan transaction.
Their draft also said financing and lending companies make their services known through various modes of advertisement such as television, radio, billboard, websites, and social media. These companies will be required to submit an affidavit of compliance to the corporate governance and finance department of the SEC containing a report of all their existing online platforms within 10 days from the effectivity of the circular.
Noncompliant companies will be slapped with monetary fines and continuous noncompliance may result in a penalty of up to PHP1 million and suspension of their license for 60 days, SEC chairman Emilio Aquino said in the draft circular.
The SEC is stepping up its efforts to regulate lending and financing companies, and this time they’ll include online entities, due to the growing number of complaints from borrowers. They have also recently issued a memorandum circular that will prohibit lenders from engaging in unfair debt collection practices by inciting violence, issuing threats, or insulting borrowers with profanity. With this, financing companies, lending companies, and their third-party service providers are no longer allowed to harass borrowers and employ unfair means to collect debts.
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