December 2, 2019. The Philippines Securities and Exchange Commission has released an updated “draft” rules on Initial Coin Offerings. Intended for banks, investment houses, and all interested parties, the Commission has requested them to submit views, comments, and inputs on the proposed guidelines.
The new guideline has been revised based on the inputs received by the agency from the previous public consultation.
SEC Updates ICO Draft Rules
The 37-page draft rules have updates ranging from the definition of terms like “blockchain”, clarification on escrow agents, and what constitutes a startup.
Upon preliminary checking, here’s what BitPinas found* on the updated draft rules:
Updated Definition of Terms
BitPinas previously received copies of position papers which we decided not to publish; most of them containing suggestions on how to define terminologies in the rule’s definition of terms. The new draft rules have incorporated some of them:
- Blockchain is now defined as a “decentralized, distributed ledger that records transactions in a particular token or tokens, in chronological order.”
- The previous definition is “an incorruptible digital ledger of economic transactions that can be programmed to record virtually all things of value, including financial transactions.”
- The definition of “Coins” has been updated to clarify that “coins” as used in the draft rules, does not include legal tender unless the context provides otherwise.
- “Start-up” is now included in the terms to refer to a venture or project which is at the initial phase of business.
- Token’s definition has been largely clarified. (The previous draft rules only has one sentence describing it.) While Tokens are still described as, among others, a medium of exchange, it does not include:
- A transaction in which a person grants value as part of an affinity or rewards program, which value cannot be taken from or exchanged with the person for legal tender, bank credit or any digital or cryptoasset; or
- A digital representation of value issued by or on behalf of the publisher and used within an online game or game platform sold by the same publisher or offered on the same game platform.
- Payment of application fees, previous not itemized, now amounts to Php 10,000
- The issuer may amend the contents of the whitepaper or other documents during the initial assessment and registration period at any time before the Commission has determined whether the ICO is for security tokens or not. When amendments are submitted, the review period of the Commission will be renewed as well.
- Startups conducting ICO must register as a corporation under the Securities Regulation Code.
- Contents of the registration statement shall include the issuer’s KYC and AMLA procedures, disaster recovery plans, a written request for ocular inspection, among others.
- The issuer must publish the filing of the registration statement in its website for 2 consecutive weeks.
- An independent Escrow Agent is now not necessary if the issuer of the security tokens can prove to the government agency that other mechanisms can be employed to satisfy the purposes of such escrow agents.
Note that the items mentioned above do not constitute all updates made by the Commission to the Draft Rules on Initial Coin Offerings.
The Securities and Exchange Commission has given all interested parties up to January 15, 2019 to submit views, comments, and inputs to email@example.com, firstname.lastname@example.org, and email@example.com.
This article originally appeared on BitPinas: Philippines Initial Coin Offering Draft Rules Updated by SEC