Verifying the SEC Registration of a Lending Company in the Philippines: A Comprehensive Legal Guide
(Updated as of 09 June 2025; Philippine jurisdiction)
1. Why Verification Matters
Under Philippine law, only entities duly registered with the Securities and Exchange Commission (SEC) as “Lending Companies” (LCs) or “Financing Companies” (FCs) may engage in the regular‐course business of extending credit to the public. Verifying registration protects borrowers and investors from:
| Risk avoided | Description |
|---|---|
| Illegal interest and fees | Unregistered lenders often impose rates and charges far above the ceilings prescribed by Bangko Sentral ng Pilipinas (BSP) and SEC regulations. |
| Harassment & privacy violations | Many “fly-by-night” digital lenders use abusive collection tactics and data scraping that expose them to criminal liability under the Lending Company Regulation Act (LCRA), Data Privacy Act, and Revised Penal Code. |
| Civil unenforceability | Loans granted by unlicensed lenders may be declared void or unenforceable; any security (e.g., post-dated checks) can be cancelled or recalled. |
| Consumer blacklisting | Victims of “loan-shark” mobile apps often find their personal information illegally posted online, harming reputations and employability. |
2. Governing Statutes & Key SEC Issuances
| Legal basis | Salient point |
|---|---|
| Republic Act No. 9474 (Lending Company Regulation Act of 2007) | Requires SEC registration and a secondary license to operate as an LC; imposes ₱10,000–₱50,000 fines and/or imprisonment for violations. |
| Republic Act No. 5980, as amended | Governs Financing Companies; similar registration and licensing régime as LCs but for larger-scale financiers. |
| SEC Memorandum Circular (MC) No. 19-2019 | Raised the minimum paid-up capital for LCs to ₱2 million; mandates submission of audited financial statements within 120 days after fiscal year-end. |
| SEC MC No. 10-2021 | Introduced Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) obligations and fit-and-proper rule for directors/officers of LCs and FCs. |
| SEC MC No. 05-2022 | Moratorium on new online lending platforms (OLPs) without prior SEC approval; existing platforms must secure a Certificate of Authority (CA). |
| SEC MC No. 09-2023 | Online Lending Applications (OLAs) must register their algorithm, privacy notice, and server location; requires on-app disclosure of SEC Registration No. & CA No. |
| Joint BSP-SEC-NTC Guidelines (2024) | Provides the “three-strike rule” for digital lending apps: three verified complaints of abusive collection can lead to delisting from app stores and revocation of SEC CA. |
3. Pre-Onboarding Checklist for Borrowers & Partners
| Step | Action | What to look for |
|---|---|---|
| 1. Corporate Name Search | Use the SEC Express System (https://secexpress.ph/) → “Company Information” | Match exact corporate name, registration number (e.g., CS201912345), and date of registration. |
| 2. Secondary License Verification | Inside company profile, look for “Lending Company – Certificate of Authority No. XXXX” with date issued. | A mere “Domestic Corporation” entry is NOT enough—the CA must expressly say “LENDING COMPANY”. |
| 3. Permit & Location Check | Retrieve the Articles of Incorporation, primary purposes, and principal office address. | Flag if office is a virtual address, co-working desk, or residential unit without business permit. |
| 4. Director/Officer Reputation | Search the SEC “List of Persons Disqualified/Under Investigation” and BSP’s “Dishonor” list. | Disqualifications under Sec. 12 LCRA include conviction, insolvency, tax evasion, and adverse AML findings. |
| 5. Paid-Up Capital Confirmation | Obtain the General Information Sheet (GIS) filed for the current year. | Verify subscribed and paid-up capital ≥ ₱2 million; confirm no par-value or unpaid subscriptions. |
| 6. Digital Platform Cross-Check | For mobile lenders, view the “App Details” section (Google Play/Apple App Store). | Must show SEC Registration No., CA No., email/landline, and Data Protection Officer. |
| 7. Consumer Complaint History | Check SEC’s “Lending Companies Advisory List” and DOJ E-Complaint Portal. | Presence in “with Cease & Desist Order” or “Revoked CA” lists = automatically risky. |
4. Red Flags Indicating Possible Fake or Suspended Registration
- Photo-edited SEC Certificate (fonts misaligned, no dry seal, uses outdated SEC logo).
- CA Number starting with “F-” – that prefix is for financing companies, not lending companies.
- NBI Clearance & DTI Certificate displayed instead of SEC registration (often used by sole proprietorships not allowed under LCRA).
- Extremely high daily-interest apps (> 1% per day) operating under shell corporations with no CA.
- “Operational fee” or “processing fee” deducted from principal before release; SEC considers this hidden interest.
- No Privacy Notice or request to grant invasive contact scraping permissions—prohibited by SEC MC 09-2023 and NPC Circular 16-01.
- Frequent change of corporate name/branding within two years—may indicate attempts to avoid pending cases.
5. How to Read the SEC Certificate of Authority (CA)
| Field | Typical Content | Meaning |
|---|---|---|
| CA Number | 1234 | Unique to the company; must appear verbatim on advertisements. |
| Date Issued / Valid Until | e.g., Issued 15 Apr 2023; valid until revoked | CA has no fixed expiry but can be suspended/revoked for violations. |
| Scope | “To operate as a Lending Company nationwide” | Some CAs contain geographic scope limitations (rare). |
| Conditions | Usually notes compliance with SEC rules on capital, AMLA, and reporting. | Violations here are grounds for summary suspension. |
6. Consequences of Operating Without, or With a Suspended, CA
| Violation | Penalties under RA 9474 & SEC MC 19-2019 |
|---|---|
| Operating without SEC CA | ₱50,000 max fine + max 10-year imprisonment; SEC may issue Cease & Desist Order (CDO) and freeze bank accounts. |
| Operating with suspended CA | Same as above; plus directors/officers can be personally liable. |
| False registration information | Administrative fine up to ₱100,000 + ₱1,000/day of continuing offense. |
| Abusive collection practices | ₱25,000 per act; possible revocation of CA & criminal prosecution for grave coercion, libel, etc. |
7. Defensive Measures for Borrowers & Investors
- Capture Screenshots of SEC profile, CA, and app details before signing any loan contract.
- Ask for Original SEC documents—inspect for embossed dry seal and compare to online copy.
- Insist on Disclosure Statement issued under Truth-in-Lending Act (RA 3765) with APR illustration.
- Use SEC’s “e-FAST” portal to report unregistered lenders or privacy breaches.
- Consult the National Privacy Commission (NPC) for data-related abuses; NPC can coordinate with SEC.
8. Frequently Asked Questions
| FAQ | Answer |
|---|---|
| Is registration with the SEC’s “Company Registration System” alone enough? | No. A lending entity must hold both a primary SEC Certificate of Incorporation and a secondary Certificate of Authority (CA) specific to lending. |
| Do lending cooperatives need an SEC CA? | No. Cooperatives are registered with the CDA and regulated under the Cooperative Code but may still require BSP approval for large-scale credit operations. |
| Can a sole proprietorship register as a lending company? | No. RA 9474 requires that a lending company be organized as a stock corporation. |
| How do I verify a foreign-owned digital lender? | Foreign equity is capped at 49% for LCs (unless PEZA or BOI incentives apply). Check the GIS for foreign ownership and SEC approval of the equity structure. |
| What if the app claims it is “BSP-Licensed”? | Irrelevant. Lending companies are regulated by the SEC, not the BSP, unless they operate as a bank or NBQB (non-bank quasi-bank). |
9. Future Developments to Watch (2025–2027)
| Pending measure | Status | Potential impact |
|---|---|---|
| “Fair Collections Practices Act” House Bill 07521 | Pending Second Reading (as of May 2025) | Will criminalize doxxing, cap collection calls to 3 per week, require recorded consent for contacting guarantors. |
| SEC Digital Corporate Registry (Blockchain) Pilot | Sandbox Phase II | Real-time CA status verification via QR code embedded in certificates—counterfeit CAs will be instantly detectable. |
| BSP‐SEC Unified Credit Info API | Public beta Q1 2026 | Borrowers will see a consolidated view of all outstanding loans from registered LCs, FCs, banks, and microfinance NGOs. |
10. Key Take-Away Checklist
- Look for both Registration No. and CA No. on any advertisement or mobile app splash page.
- Cross-verify on SEC Express or e-FAST—never rely solely on PDFs sent via email.
- Match exact corporate name—spacing, punctuation, Inc. vs Corp., etc.
- Check SEC advisories for CDOs, revocations, or scam alerts.
- Report suspicious lenders to SEC Enforcement and Investor Protection Department (EIPD) via ✉ email: epd@sec.gov.ph or hotline +63 2 8818-5769.
Disclaimer: This article is for informational purposes only and does not constitute legal advice. Consult a Philippine lawyer or the SEC for guidance on specific situations.