Compliance with SEC Memorandum Circular No. 19, Series of 2019 Disclosure Requirements on Advertisements of Financing Companies and Lending Companies and Reporting of Online Lending Platforms

June 22, 2021 CORPORATE GOVERNANCE AND FINANCE DEPARTMENT TO : Financing Companies and Lending Companies SUBJECT : Compliance with SEC MemorandumCircular No. 19, Series of 2019 Disclosure Requirements on Advertisements of FinancingCompanies and Lending Companies and Reporting of Online Lending Platforms NOTICE In line with the Securities and Exchange Commission's (SEC) regulatory and supervisory authority over financing companies (FCs) and lending companies (LCs) under Republic Act No. 8556, or the Financing Company Act of 1998, and Republic Act No. 9474, or the Lending Company Regulation Act of 2007, respectively, FCs and LCs that own/operate/utilize online lending platforms ( e.g. , mobile applications, websites, etc.) are hereby warned to strictly comply with SEC Memorandum Circular No. 19, Series of 2019 on the Disclosure Requirements on Advertisements of Financing Companies and Lending Companies and Reporting of Online Lending Platforms (SEC MC 19). Section 4 of SEC MC 19 lays down the acts and omissions that are considered to be violations thereof and the prescribed penalties, to wit: SEC. 4 Penalties. The penalties below shall be imposed for the following violations: 1 a. Non-compliance with Items A and B of Section 1 (Required Disclosures) xxx xxx xxx b. Non-compliance with Section 2 (Registration of Business Name) xxx xxx xxx c. Non-compliance with Section 3 (Report to the Commission) Failure to submit the Affidavit of Compliance (SEC Form 1) containing a report of all existing Online Lending Platforms Submission of the Affidavit of Compliance (SEC Form 1) with Incomplete information/list of all existing Online Lending Platforms Failure to submit the Affidavit of Compliance (SEC Form 2) containing a report of all prospective Online Lending Platforms that are to be developed/utilized Commencement of operations of the Online Lending Platform/s without submission of the required Affidavit of Compliance (SEC Form 2) d. Continuous non-compliance/submission of false or fraudulent Affidavit of Compliance Subject to the facts, circumstances and gravity of the offense, the Commission, at its discretion, may impose a Fine of not less than twice the basic penalty but not more than One Million Pesos (P1,000,000.00) or Suspension of lending and financing activities for a period of sixty (60) days; or Revocation of Certificate of Authority to operate as a Financing or Lending Company, as appropriate for each circumstance. (Emphasis supplied) Continuous failure to comply despite being given notice of violations and an opportunity to make the necessary corrections shall constrain the Commission to revoke the company's Certificate of Authority to Operate as a Financing/Lending Company. Pasay City, June 22, 2021. Footnotes 1. Amount of corresponding monetary fines are omitted.