Before you invest and transact, you better check and verify SEC Registration and other issued licenses first! If a company or corporation has secured both a Primary SEC Registration and a Secondary License, say to offer or sell securities and solicit investments from the public, then there is no problem with its legalities. It is legal, and hence legal to do so.
However, if what it has is just a Primary SEC Registration, and it is soliciting investments without any additional license, it is but a legal business entity (being SEC-registered) operating illegally. It must be deviating already from its declared business purpose and operations. In this case, a Primary SEC Registration alone is not sufficient. Likewise, if neither of these registration and license has been secured, then there’s a big question of its legality. You must not entrust then even a little of your hard-earned money with it and its representatives.
As the registrar and overseer of the Philippine corporate sector, the Securities and Exchange Commission (SEC) is the Philippine national government regulatory agency in charge of the supervision of the capital market, legal regulation of issuances and sales of securities and other investment instruments, and safeguard of the investing public (Read more about Securities and Exchange Commission).
A corporation is defined by the Commission as a juridical person created by operation of law and registered with the Securities and Exchange Commission (SEC).
What is Primary SEC Registration?
A Primary SEC Registration only grants juridical personality, hence a general license to operate business under the Corporation Code of the Philippines. It does not automatically give a company the authority to engage in all types of business activities such as lending, selling of securities and investment contracts, and investment taking, among others. Here are the business entities requiring a Primary SEC Registration:
- Stock Corporations (including foreign corporations, e.g., branch offices, representative offices, regional headquarters, or regional operating headquarters), or corporations with authorized capital stock divided into shares either with or without par value.
- Non-Stock Corporations (foundations, associations, non-government organizations, religious organizations, and others), or corporations without authorized capital stock and which are usually organized for charitable, religious, educational, professional, cultural, fraternal, literary, scientific, social civil service, or similar purposes, like trade, industry, agricultural and like chambers, or any combinations thereof.
- Partnerships (general and limited partnerships), or entities existing where two or more individuals combine their capital, property, skill, labor, or all of these, for the transaction of a lawful business for gain, upon an understanding that profits or losses shall be shared or borne by them in certain proportions.
Upon submission of SEC registration requirements and successful application, corporations and partnerships are given the following:
- Certificate of Incorporation (for incorporation of stock and non-stock corporations)
- Certificate of Recording (for formation of partnerships)
- License to Do Business in the Philippines (for establishment of foreign branches or representative offices).
What is Secondary SEC Registration (License)?
A Secondary SEC Registration or Secondary License is a special legal grant to corporations and partnerships to undertake and engage in special and particularized business activities such as but not limited to brokerage or dealership of securities and public solicitation of investment funds. Secondary SEC licensees are grantees of a license from the Commission, namely:
- Issuers of Registered Securities to the Public
- Investment Houses
- Brokers and Dealers of Securities
- Investment Companies and Mutual Funds
- Government Securities Eligible Dealers
- Universal Banks Registered as Underwriters of Securities
- Investment Company Advisers
- Clearing Agencies and Clearing Agencies as Depositories
- Stocks and Securities Exchanges
- Financing Companies
- Lending Companies
- Transfer Agents, and
- Other Corporations as may be required by law to secure a secondary license from the Commission to be able to engage in certain business activities.
What is the difference between Primary SEC Registration and Secondary License?
In simpler terms, (a) if a company or corporation has secured both a Primary SEC Registration and a Secondary License, say to offer or sell securities and solicit investments from the public, then there is no problem with its legalities. It is legal, and hence legal to do so.
However, (b) if what it has is just a Primary SEC Registration, and it is soliciting investments without any additional license, it is but a legal business entity (being SEC-registered) operating illegally. It must be deviating already from its declared business purpose and operations. In this case, a Primary SEC Registration alone is not sufficient.
Likewise, (c) if neither of these registration and license has been secured, then there’s a big question of its legality. You must not entrust then even a little of your hard-earned money with it and its representatives.
How to Check and Verify SEC Registration of a Company
To prevent from being scammed, checking and verification of Primary SEC Registration and Secondary License of a company or corporation is a must.
As indicated however, SEC Registration generated does not guarantee that the corporation is authorized to sell to the public, securities or other investment instruments. It’s just a registration with SEC under the Corporation Code of the Philippines.
To check and verify further its Secondary SEC Registration or Secondary License online, visit SEC Capital Market Participants Registry System at www.cmprs.sec.gov.ph. There, you may search for SEC Registration and License information for both institutional and individual (professional) registered capital market participants.
See screenshots below of COL Financial Group, Inc. and its Secondary SEC Registration or Secondary Licenses (Broker/Dealer in Securities (BD) and Mutual Fund Distributors (MFD)):
You may also visit Securities and Exchange Commission (SEC) Main Office at Secretariat Building, PICC Complex, Roxas Boulevard, Metro Manila Philippines, or call SEC Company Registration and Monitoring Department at 818-5554, 818-8803 (Hotlines), 279, 284, 214, and 256 (Locals).
Disclaimer: The author is not directly affiliated with Securities and Exchange Commission of the Philippines. Please take this article as a quick guide on how to check and verify SEC Registration of a company and not a help page for your other concerns and issues with the Commission. Should you find an interest writing another blog article of the same topic and use this one as your reference, please link us back and make sure you do not plagiarize.