Following the previous push for stronger transparency, the Securities and Exchange Commission has officially released a memorandum for Beneficial Ownership (BO) Rules effective on January 1, 2026.
With the issuance of SEC Memorandum Circular No. 15, series of 2025, the Commission has critically made a shift as to how entities should identify, report, and maintain records of true owners and controllers in their business. It signalled a much stricter, data-driven compliance environment for those who are operating in the Philippines.
From Draft Guidelines to Enforceable Rules
In October 2025, the SEC introduced draft guidelines for broader disclosure principles regarding Beneficial Ownership. By December 2025, these proposals were formally adopted through SEC MC No. 15, s. 2025, effectively consolidating feedback received during the draft phase and translating it into enforceable rules with a stronger emphasis on accuracy, timeliness, verification, and accountability.
According to the SEC, the new framework is a combination of the current regulations and endorses a structured, verifiable beneficial ownership data — which allows regulators and other authorities to access reliable information for lawful purposes. Thus, this aligns with the country’s effort in the prevention of financial crimes such as money laundering, financing terrorism schemes, and sponsoring illicit activities through corporate entities.
In other words, beneficial ownership disclosure is no longer a formality in paper, but a core compliance obligation for fostering a better corporate environment.
Who is Covered under the New Rules?
The scope of the new rules regarding Beneficial Ownership is comprehensive. They apply to all corporations that are within the jurisdiction of the Commission, such as Domestic and Foreign Stock corporations, Non-Stock corporations, Partnerships, and One-person corporations.
Additionally, it also extends responsibility to directors, trustees, officers, shareholders, members, corporate secretaries, resident agents, and other covered persons under the SEC.
Furthermore, as defined by the rules, a Beneficial Owner is any natural person who exercises ownership, control, or influence over a corporation or legal entity, directly or indirectly, whether through shares, voting power, contractual arrangements, or other means.
The key indicator of the updated rules is the 20% threshold, which is consistent with the Anti-Money Laundering Council (AMLC) regulations. Any individual who owns or controls at least 20% of voting rights, shares, or capital must be disclosed.
Besides the ownership percentages, the SEC also classifies beneficial owners into different categories, ranging from A to I — which covers a variety of forms of control and influence, including indirect ownership, nominee arrangements, and other mechanisms that may be interpreted as true control
Key Factors in the New Established Rule
The finalized rules introduced several practical and operational changes that businesses must be prepared for:
- Mandatory Verification of BO Information – the SEC will implement verification mechanisms to verify and validate the submitted BO data and raise such discrepancies. This significantly raises the compliance bar, as inaccurate or incomplete disclosures are more likely to be flagged.
- Nominee Reporting is not an option – business entities must explicitly disclose nominee arrangements, putting an end to a common loophole used to conceal beneficial ownership.
- Timely Report of Changes – any changes regarding beneficial ownership must be reported promptly and not just during annual filings of compliance. Delayed disclosure of changes can lead to penalties.
- Dedicated Registry – the SEC will launch a standalone digital BO registry, which replaces the current practice of submitting BO data through General Information Sheet (GIS) and eFAST. Once it is operational, the BO section will be removed from the GIS, corporations will submit a simplified annual attestation if no changes occur, and the system will remain integrated with eFAST for filing consistency.
Stronger Penalties as Consequences
Indeed, the most significant change is in enforcement. Non-compliance with BO disclosure rules carries graduated monetary penalties that are based on retained earnings or fund balance. Fines are now ranging from tens of thousands to millions of pesos, depending on the severity and frequency of violations committed.
Further, a more critical violation is the submission of false or misleading beneficial ownership information — which may result in fines up to ₱2 million, revoked corporate registration, and disqualification of responsible directors or officers involved for up to five years.
Hence, the SEC is serious about the enforcement of BO rules, and it is a matter that must not be overlooked in any sense by a corporation.
Why This Matters for Businesses in 2026
The message from the SEC is clear — transparency and accountability are non-negotiable. The new Beneficial Ownership Disclosure Rules place a greater sense of responsibility on corporations to:
- Be knowledgeable about who truly owns or controls their business operations
- Maintain accuracy in records and be up-to-date
- Implement stricter internal controls that support compliance
- Ensure accountability at the board and officer levels
This is not just a regulation update. It is rather governance and risk management issues that directly affect reputation, investors’ confidence, and the continuity of the company.
Stay Ahead of the Beneficial Ownership Compliance
Nevertheless, the SEC’s Beneficial Ownership Disclosure Rules establish a new era for corporate transparency in the Philippines, having higher standards, stricter enforcement, and heavy consequences for non-compliant corporations.
Need help navigating the new BO requirements? With Babylon2k’s compliance and corporate advisory services, we can help you assess your current disclosures, identify risk areas, and prepare for full compliance under the 2026 rules.
👉 Talk to our experts today and secure your compliance advantage!
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