On August 2, the Philippine market regulator, the Securities and Exchange Commission (SEC) released its draft rules on Initial Coin Offerings (ICOs) to regulate cryptocurrencies trading. The SEC said:
“Despite being analogous to securities, the present registration process for initial public offering [IPO] may not be tailor fit for the initial coin offering. Hence, the proposed rules have been formulated for the registration of security tokens offered through initial coin offerings”.
According to the regulator, the proposed rules shall primarily govern the conduct of ICOs, where startups issue convertible security tokens and registered corporations organized in the Philippines, as well as companies that want to sell their platform to local investors.
At the same time, the SEC is seeking feedback from banks, investment houses, the investing public and all interested parties before finalizing the rules.
The proposed regulation pointed out that any company that will conduct an ICO has to register with the SEC and to undergo an initial assessment. The initial assessment will also determine if the tokens being offered are not security tokens. The Commission said it would act on the request for the evaluation 20 days after receipt of the document.
“In case the Commission classifies the token as security tokens in accordance with these rules and the principal office of the issuer is located outside the Philippines, the issuer must establish a branch office within Philippine jurisdiction,” – the SEC added.
The members of the Philippine Association for Digital Commerce and Decentralized Industries (PADCDI) welcome the latest development.
“I have to say, so far, I like what I’m reading in the SEC Guidelines for ICOs”, – commented Magellan Fetalino, the member of PADCDI.