SEC cautions against hasty purchases of club membership shares
MANILA, Philippines - Corporate regulators are warning investors against hastily buying membership club shares, advising them to conduct due diligence.
In a public notice, the Securities and Exchange Commission (SEC) outlined several measures to help investors make the right transactions.
“Before buying shares or membership certificates such as time shares, memberships in resorts, golf, country and other clubs, the public is reminded to consider the suggested guidelines,” SEC said.
For one, investors should verify if the shares or certificates are registered with the SEC. Brokers and sales people should also be registered.
The issuer, which should be the owner of the property where the club is located, is also expected to be financially sound, SEC said.
“If the issuer is leasing the property where its facilities are located, verify the terms and conditions of the lease contract,” SEC said.
Corporate regulators also outlined several pointers for investors that already closed a deal.
“Your share and certificate shall be issued within 60 days from date of full payment,” SEC said.
“Membership in the club is not automatic. The issuer corporation has to approve your application for membership before actual sale and transfer of the share is executed,” it added.
The issuers, for their part, are barred from collecting membership dues unless the project is 50 percent useable as provided in the prospectus.
“No increase (in membership dues) can be affected unless a report under oath of such increase and the rationale for it has been submitted to SEC,” corporate regulators said.
Popular and most expensive membership clubs in the Philippines include the Manila Polo Club, Manila Golf & Country Club and Wack Wack Golf & Country Club.