The Securities and Exchange Commission (SEC) has been bolstered with more robust enforcement powers to counter financial fraud and other abuses aimed at consumers, following the implementation of the Financial Products and Services Consumer Protection Act’s (FCPA) implementing rules and regulations (IRR).
The IRR of Republic Act No. 11765 or the FCPA, applies to all financial products and services, as well as financial service providers that come under the SEC’s jurisdiction.
The range of financial products and services covered includes credit, securities, investments, and digital financial products or services accessible through digital channels.
SEC chairperson Emilio Aquino emphasized the IRR’s adherence to the FCPA’s goals, safeguarding financial consumers’ right to fair and equitable treatment, as well as protecting consumer assets against fraud and misuse. The regulations also mandate that consumers receive timely handling and redress of complaints.
Moreover, the IRR reinforces the SEC’s regulatory authority over tokenized or digital forms of securities, while expanding the enforcement actions the agency may take, such as the restriction of excessive or unreasonable interest, fees, or charges; disqualification or suspension of directors, trustees, officers, or employees; and disgorgement.
The SEC warned that violating provisions of the FCPA or its IRR may result in imprisonment of one to five years, a fine of P50,000 to 2 million, or both.
Administrative sanctions, including a fine of P50,000 to P10 million for each instance of investment fraud and a daily fine of not more than P10,000 for continuing violations, may be imposed on individuals responsible for investment fraud, the SEC added.