By Michael Mislos and Sean Millare
The Philippines Securities and Exchange Commision (SEC) says it is finalizing the rules for digital asset offerings (DAO) and digital asset exchanges (DAX) this year. This was announced in a press conference wherein the Commission formally launched the PhiFintech Innovation Office (PIO) which aims to focus on the regulation of the use of fintech in the Philippines.
The PhilFintech Innovation Office (PIO) is mandated to “reduce the gaps in consumer and investor protection tempered by financial inclusion, integrity, and stability.” The PIO will focus on creating better-informed policies for new and existing fintech innovators and capacitate the SEC to effectively regulate fintech activities.
During the press conference attended by BitPinas, Commissioner Kelvin Lee noted that the PIO can act as the first office that fintech companies can go to be better informed about existing regulation and policies of the SEC with regards to the industry. Chairman Emilio Aquino said, “In this way, before they start their fintech business, they can clarify with us first, know the requirements, and other things they need to know or things required of them before they start operating.”
The PIO will be involved in the registration and will serve as the first point of contact for existing fintech companies, “which have been operating without proper regulation or authorization, or which will introduce new fintech products,” the SEC said. Once the PIO analyzed and understood the fintech business models presented to them, the Commission would formulate and execute regulatory responses geared in protecting investors and market participants, “while concurrently promoting the growth of fintech firms.” The SEC cited that it approved Investree Philippines Inc, in 2020, the country’s first crowdfunding portal, as well as the Bonds.ph and the distributed ledger technology (DLT) application of Philippine Digital Asset Exchange (PDAX), a licensed virtual assets services provider (VASP) to distribute Retail Treasury Bonds intended to reach smaller investors.
The SEC is expecting that it will release its rules on digital asset offerings (DAO) and digital asset exchanges (DAX) before the year ends. “DAX and DAO rules are the priorities of the Philfintech Innovation Office. The rules aim to be as expansive as possible,” Commissioner Lee said. (Read More: Blockchain Meetup in Manila Discussed PH SEC’s Draft Rules on Digital Asset Exchanges)
According to a survey, the Philippines ranked 44th out of 158 countries in the recent United Nations Conference on Trade and Development’s Readiness Frontier Technologies Index, where Philippines placed second on Information and Communications Technology deployment, skills, research, development, industry activity and access to finance among a host of countries.
According to SEC Chairperson Emilio Aquino, it is integral to SEC’s mission to support innovative emerging business concepts as well as to ensure the safety of its people managing risks and he also added that the Commission “embeds safeguard in every action and further intensifies its enforcement and education campaigns to protect not only investors and other financial consumers, but also the integrity of the business sector.”
This article is published on BitPinas: SEC Commits to Finalize Rules on Digital Asset Exchanges This 2021, Launches Fintech Innovation Office