SC voids BIR, SEC rules forcing firms to disclose investor data

By Joel R. San Juan @jrsanjuan1573

THE Supreme Court has declared void for being unconstitutional the regulations issued by the Bureau of Internal Revenue (BIR) and the Securities and Exchange Commission (SEC) requiring businesses, including those in the banking and financial sectors, to disclose the names of their investors including their addresses, tax identification number (TIN) and their corresponding amount of income and withholding tax.

In a 46-page decision penned by Associate Justice Ramon Paul L. Hernando, the SC held that BIR Revenue Regulations 1-2014, Revenue Memorandum Circular (RMC) 5-2014 and SEC Memorandum Circular (MC) 10 (Series of 2014) violate the petitioners’ right to privacy and due process.

The Court raised the possibility of abuses in the enforcement of the regulations.

“There is no assurance that the information gathered and submitted to the listed companies pursuant to the questioned regulations will be protected and not be used for any other purposes outside the stated purpose,” the SC stressed.

“The investors provided their information to the brokers, presumably without the intention of sharing such with any other entity, including the investee companies and the BIR,” it added.

Criminal penalties

ON September 9, 2014, the Court