The SEC after having sent out more than 300 Show Cause Letters twice to corporations operating as lending companies without having obtained Certificates of Authority (Secondary License).
Section 4 of R.A. 9474 states that “xxx No lending company shall conduct business unless granted an authority to operate by the SEC”.
84 out of the 300 letters were returned to sender, which has prompted the SEC to suspend for 60 days those 84 lending companies for failure to respond to the Show Cause Letters. If during the suspension period, the SEC has still not heard from those lending investors, proceedings for the revocation of their Certificates of Registration (Primary License) with the SEC shall be implemented.
R.A. 9474 was approved on 22 May 2007 and one year after the effectivity of the Act or on 12 June 2008, all persons and entities engaged in lending activity should have secured their Certificates of Authority.
Director Justina F. Callangan, of the SEC’s Corporate Governance and Finance Department, tasked to regulate lending companies, explained that R.A. 9474 was approved on 22 May 2007 and one year after the effectivity of the law or on 12 June 2008, all persons and entities engaged in lending activity should have secured their corresponding CAs. She underscored the fact that said entities have been given more than sufficient time to comply with the law, hence, their continued noncompliance warrants their suspension.
“The Commission is one with the President in adopting a tough stance against illegal lending that is why it is pursuing with much vigor all those engaged in it”, Director Callangan added.
Aside from suspension, per Section 12 of R.A. 9474, a fine of not less than Ten Thousand Pesos (Php 10,000.00) or imprisonment of not less than six (6) months but not more than ten (10) years or both, await those who violate the law through, among others, failure or refusal to incorporate and obtain a license from the SEC to engage in lending.
April 06, 2017
SEC SUSPENDED ADDITONAL 20 LENDING COMPANIES
The Securities and Exchange Commission suspended the certificates of registration as corporations of additional 20 lending companies which failed to obtain a Certificate of Authority to Operate (CA) as a Lending Company required under Republic Act No. 9474 or the Lending Company Regulation Act of 2007.