SEC Issues Revised Beneficial Ownership Disclosure Rules

Yasser Aureada
3 days ago
5 min read

What Corporations Must Know Before 2026

The Securities and Exchange Commission (SEC) has issued SEC Memorandum Circular No. 15, Series of 2025, introducing the Revised Beneficial Ownership Disclosure Rules—a sweeping regulatory update that significantly strengthens corporate transparency, anti-money laundering controls, and enforcement mechanisms in the Philippines.

Set to take effect on 1 January 2026, the new rules replace and consolidate earlier issuances and align Philippine corporate regulation with Financial Action Task Force (FATF) standards.

This article provides a comprehensive yet practical guide to the most important provisions that corporations, partnerships, and reporting entities must understand and prepare for.

Why the SEC Revised the Rules

The SEC issued the revised rules to address:

Abuse of corporate vehicles for money laundering, terrorist financing, and corruption
Use of nominees, layered entities, and complex ownership structures to conceal true ownership
International obligations under FATF and global transparency standards

The rules reinforce the principle that corporations must be used only for legitimate purposes, and that regulators must always be able to identify who ultimately owns or controls an entity.

Who Is Covered

The Revised Beneficial Ownership Disclosure Rules apply broadly to all persons under SEC jurisdiction, including:

Domestic stock and non-stock corporations
One-Person Corporations (OPCs)
Partnerships and joint ventures
Foreign corporations licensed to do business in the Philippines
Incorporators, directors, trustees, officers, shareholders, and members
Beneficial owners and nominees
Applicants for incorporation or SEC registration

In practice, almost all SEC-registered entities are covered.

Only Natural Persons Can Be Beneficial Owners

A central principle under the revised rules is that only natural persons may be recognized as beneficial owners.

Legal entities—including corporations, partnerships, trusts, and estates—cannot be beneficial owners, although they may exist within the ownership or control chain.

The Nine (9) Categories of Beneficial Ownership

An individual qualifies as a beneficial owner if they fall under any of the following categories:

Category A – Ownership

Direct or indirect ownership of at least 20% of voting rights, voting shares, or capital.

Category B – Contractual Control

Control exercised through contracts, agreements, relationships, or intermediaries.

Category C – Board Election Power

Power to elect a majority of the board or equivalent governing body.

Category D – Dominant Influence

Ability to exert dominant influence over management or corporate policies.

Category E – Direction of the Board

Board members act according to the individual’s instructions or wishes.

Category F – Property Stewardship

Acts as steward or administrator of corporate properties or assets.

Category G – Nominee Arrangements

Ownership or control exercised through nominee shareholders or directors.

Category H – Other Control Mechanisms

Any other means of ultimate control, including exclusive economic benefits.

Category I – Senior Management (Last Resort)

Senior management officers, only when no beneficial owner can be identified under Categories A–H.

A single individual may qualify under multiple categories simultaneously.

Prohibition of Bearer Shares and Mandatory Nominee Disclosure

Absolute Ban on Bearer Shares

The issuance, sale, or transfer of bearer shares or bearer share warrants is strictly prohibited.

Mandatory Nominee Disclosure

Nominee incorporators, directors, trustees, or shareholders must disclose:

Their nominator or principal
Full identifying details of the nominator
Trust relationships, where applicable

False declarations may result in severe penalties, including disqualification.

Special Rules for OPCs, Trusts, and Estates

One-Person Corporations (OPCs)

The single stockholder is always a beneficial owner.

OPCs with a Trust as Stockholder

Beneficial owners include:

Trust beneficiaries
Trustors, settlers, or grantors
Trustees or administrators exercising control

OPCs with an Estate as Stockholder

Beneficial owners include:

Heirs and legatees
Executors or administrators
Persons exercising effective control over the estate

Tiered and Cross-Border Ownership Structures

Tiered Ownership Structures

Ownership percentages are multiplied across layers
Even if the final ownership interest falls below 20%, a person is still a beneficial owner if they exercise effective control at any level

Cross-Border Structures

Corporations must trace ownership across all jurisdictions
The SEC may accept foreign certifications
The SEC may coordinate with foreign regulators

Information Required for Disclosure

Personal Information (Per Beneficial Owner)

Full name
Residential address
Date of birth
Sex
Nationality
Civil status
Contact details
Tax Identification Number (TIN) or passport number
Politically Exposed Person (PEP) status
Date the individual became a beneficial owner

Ownership and Control Details

Applicable beneficial ownership category
Percentage of ownership or voting rights (if applicable)
Nature and means of control
Date ownership or control was acquired

Responsibility for Compliance

Primary responsibility for compliance lies with:

Domestic corporations – Corporate Secretary or authorized representative
Foreign corporations – Resident Agent
One-Person Corporations (OPCs):
- Single stockholder (if a natural person)
- Trustee (if held in trust)
- Executor or administrator (if held by an estate)
Other entities – Designated legal representative

Filing Timelines You Cannot Miss

Initial Disclosure

New entities – Upon incorporation or registration (SEC approval will not be granted without beneficial ownership disclosure)
Existing entities – With the next General Information Sheet (GIS) following effectivity

Changes in Beneficial Ownership

Must be reported within seven (7) calendar days from the date of change

Beneficial Ownership Registry

All disclosures must be filed through the SEC Beneficial Ownership Registry
Pending full implementation, filings will continue via the GIS through the eFAST system
Once operational, beneficial ownership disclosures will be exclusively filed online

SEC Powers: Verification, Access, and Information Sharing

The SEC is empowered to:

Examine consistency with corporate records
Require additional documentation
Conduct audits and targeted reviews
Coordinate with other government agencies
Share information through APIs with authorized users

Access to beneficial ownership information may be granted to:

Law enforcement agencies
Competent authorities
Covered AML persons
Media organizations, within legal limits
The public, where permitted by law

Liability of Directors, Trustees, and Officers

The revised rules impose direct personal accountability on directors, trustees, and officers.

Potential liabilities include:

Personal fines of up to ₱1,000,000
Disqualification for up to five (5) years for false or misleading declarations
Prima facie evidence of negligence arising from the absence of internal beneficial ownership policies and controls

Beneficial ownership compliance is therefore a core governance obligation, not a mere filing requirement.

Enforcement, Whistleblowers, and Public Disclosure

SEC Enforcement Powers

To ensure compliance, the SEC may:

Issue compliance and enforcement orders
Require corrective and remedial measures
Allow settlements, except for repeated or deliberate violations
Publish lists of non-compliant entities

Whistleblower Protections

Whistleblowers:

May report violations to the SEC
Are protected under SEC whistleblower policies
May receive compensation where permitted by law

Effectivity and Transition

The Revised Beneficial Ownership Disclosure Rules take effect on 1 January 2026.

During the transition:

Previously filed beneficial ownership disclosures remain valid for their respective filing periods
The SEC retains authority to require corrections, updates, or supplemental disclosures
Inconsistencies with prior SEC circulars are deemed repealed

Key Takeaways for Corporations

Beneficial ownership transparency is now strictly enforced
Disclosure obligations are continuous, not one-time
Nominee and layered ownership structures face heightened scrutiny
Directors, trustees, and officers face personal liability
Internal beneficial ownership policies and documentation are essential

Final Thoughts

The Revised Beneficial Ownership Disclosure Rules represent one of the most significant corporate compliance reforms in recent years.

Organizations that prepare early—by mapping ownership structures, updating internal records, and strengthening governance processes—will be best positioned to minimize regulatory exposure and avoid penalties.

For entities with complex ownership arrangements, foreign parent companies, or nominee structures, proactive compliance is no longer optional—it is a necessity.