The Securities and Exchange Commission (SEC) on Friday launched a new office which will be in charge of regulating and addressing the concerns of the growing financial technology sector in a bid to further promote financial inclusion and protect investors and other financial consumers.
At a virtual event, the SEC formally launched the PhiliFintech Innovation Office (PIO), under its Corporate Governance and Finance Department (CGFD), which will focus on the regulation of the use of fintech, or financial technology, in the Philippines.
The PIO is mandated to reduce gaps in consumer and investor protection tempered by financial inclusion, integrity, and stability through a dedicated focus on the regulation and growth of fintech activities; create better-informed policies for new and existing fintech innovators; and capacitate the SEC with expertise to effectively regulate fintech activities and promote an innovative culture in the corporate sector.
“Integral to our mission of championing the business sector, the capital market and the investing public, is fostering innovation,” said SEC chairperson Emilio Aquino.
“Accordingly, the Commission has supported new and emerging business concepts while taking a proactive stance against any excessive risk buildup to ensure market integrity. The PhiliFintech Innovation Office will be at the forefront of building an enabling regulatory environment for fintech, in particular,” Aquino said.
Regulating innovative trading markets and technology-based ventures is part of the mandate of the SEC, as provided under Republic Act No. 8799, or the Securities Regulation Code.
The SEC previously supervised the registration and granting of licenses for non-traditional securities and instruments through its Non-Traditional Department, which was later abolished following the creation of the Insurance Commission in 2010.
The corporate regulator said it has since delegated the regulation of non-traditional securities and fintech initiatives to other departments and treated them on a case-to-case basis.
To better prepare the country for fintech innovation, the SEC said it created the PIO in order to give greater regulatory focus on the industry.
The Philippines ranked 44th out of 158 countries in the United Nations Conference on Trade and Development’s Readiness for Frontier Technologies Index.
It also placed second in information and communications technology deployment, skills, research and development, industry activity, and access to finance among a host of countries.
The SEC said the PIO will facilitate the processing of the registration of new fintech companies along with the appropriate department of the commission.
It shall likewise 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 PIO shall document, analyze, and understand fintech business models and their possible impacts on the market and its participants.
With this, the SEC said it will be able to formulate and execute regulatory responses geared toward protecting investors and market participants, while concurrently promoting the growth of fintech firms.
Prior to the creation of the PIO, the SEC has been issuing rules and regulations in response to new technologies emerging in the market.
In 2019, the commission issued the Rules and Regulations Governing Crowdfunding, which allowed startups and small and medium-sized enterprises greater access to funding.
It approved the country’s first crowdfunding portal, Investree Philippines, Inc., on December 22, 2020.
The SEC Philippines also approved in 2020 the use of the application Bonds.PH, and the PDAX DLT platform in distributing Retail Treasury Bonds to reach small investors, including the unbanked.
It also cleared the selling of Premyo Bonds and treasury bonds through the country’s first branchless, digital-only bank – Overseas Filipino Bank – to cater to Filipinos working abroad.
The SEC said it also is preparing rules governing digital asset offerings and digital asset exchanges to provide the investing public with more options, as well as protect them from the misuse of such emerging assets.
“As it supports new and emerging business concepts, the Commission is cognizant of the risks that come with innovations,” said Aquino.
“To manage the risks, the commission embeds safeguards in every policy 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,” he added.—AOL, GMA News
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