The Philippines is set to introduce new directives regulating how firms can legitimately raise funds via ICOs (Initial Coin Offerings).
Philippines securities and exchange commission (SEC), produced draft regulations that will govern ICOs on Thursday. It is now waiting for public approval before they can put it into effect.
The new directives will assume that all the tokens issued during ICOs are securities automatically, unless proven otherwise by the people who have issued them.
In a recent press release comment, the financial watchdog hinted that majority of ICOs carried out in the Philippines have claimed that their tokens weren’t securities and that SEC shouldn’t interfere.
Nevertheless, SEC said that it would be wrong to allow investors make decisions over the issue on their own since they do not have sufficient resources to tell which ICO is a scam and which one is not.
With the new proposed rules, all firms operating in the Philippines and looking to carry out a token sale will be required to hand in an initial assessment application to the SEC 90 days prior to ICO issuance.
The application will need to contain the name, resumes, and ages of the team heading the project. Furthermore, they will also need to submit a review of the ICO proposal and its reliability, and a legitimate opinion from an independent third party justifying why the token shouldn’t be used as a security.
Philippines SEC New Regulations
Once that has been verified, the SEC will give a written report that will further confirm its decision on whether the presented ICO is a securities issuance or it’s not.
The proposal, in addition, states that ICO issuers can go ahead with their project even if SEC deems their tokens as securities. The only thing they must adhere to is completion of a registration process and get approved by the regulator before the token sale starts.
If an ICO will be issued to a maximum of 20 individuals, or will be for specific investors such as insurance firms, investment companies, and banks, it may not be subjected to the registration requirement.
These new directives come at the same time when different countries all over the world are trying to create rules that will control ICOs or are coming up with guidelines on how to avoid falling victim of scam ICOs.
Recently, a Thailand financial watchdog launched a legitimate registration process that lets ICO projects raise funds in a manner that meets all the legal frameworks.