The Securities and Exchange Commission said Wednesday it released the draft implementing rules and regulations of Republic Act No. 11765, or the Financial Products and Services Consumer Protection Act that aims to protect buyers of financial products and services.
It said in a statement the draft guidelines would provide the country’s financial regulators with more enforcement powers, while also requiring financial service providers to offer free assistance to financial consumers on financial transaction concerns, including complaints, inquiries and requests.
The SEC said the draft rules would expand its enforcement actions, which would include the restriction on the ability of the financial service provider to collect excessive or unreasonable interests, fees, or charges; disqualification and/or suspension of directors, trustees, officers, or employees; imposition of fines, suspension or penalties; issuance of cease and desist orders; suspension of operation; and disgorgement.
Under the draft IRR, consumers may institute an independent civil action on behalf of aggrieved financial consumers for violations of the FCPA and its IRR, depending on the nature, effects, frequency, and seriousness of the violation.
Persons who violate provisions of the FCPA or the rules pursuant to its implementation will be punished by imprisonment of not less than one year, but not more than five years, or by a fine of not less than P50,000 but not more than P2 million or both, at the discretion of the court
Meanwhile the draft guidelines will require financial service providers to integrate a Consumer Protection Risk Management System into its enterprise-wide risk management processes and risk governance framework.
The CPRMS includes the governance structure, policies, processes, measurement, and control procedures to ensure that consumer protection risks are identified, measured, monitored and mitigated.
The draft rules will further provide additional protection to financial consumers by requiring financial service providers to continuously evaluate their financial products or services to ensure that they are appropriately targeted to the needs, understanding, and capacity of both their markets and their clients.
All interested parties have until Feb. 7 to submit to the SEC their comments on the proposed guidelines.