The Philippines’ financial regulator aims to toughen rules for crypto and financial service providers.
The Philippines Securities and Exchange Commission (SEC), the registrar and overseer of the Philippine corporate sector, reportedly wants to hold more power over the local crypto industry.
According to the news report shared by the Manila Bulletin, the Philippines SEC has drafted the “Implementing Rules and Regulations (IRR) of Republic Act No. 11765” for public comment.
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Regarding the matter, the Securities and Exchange Commission noted:
The draft IRR will operationalize the newly signed law that aims to protect the interests of financial consumers by strengthening the country’s financial regulators by providing them with rule-making, surveillance, inspection, market monitoring, and more enforcement powers.
In the new guidelines, SEC is set to expand the definition of security, which now includes “tokenized securities products” or other financial products launched through distributed ledger technology (DLT) and blockchain technology.
Nevertheless, SEC aims to extend its enforcement actions, allowing it to “collect excessive or unreasonable interests, fees or charges;” suspend firm directors, trustees or employees; “imposition of fines, suspension or penalties; issuance of cease and desist orders; suspension of operation; and disgorgement.”
The draft guidelines obligate financial service providers and crypto firms to integrate a Consumer Protection Risk Management System (CPRMS) into their “risk management and governance framework.” On top of that, financial service providers will also be required to issue a Financial Consumer Protection Assistance Mechanism (FCPAM).
On top of that, under the new rules, financial service providers may have to adopt a “cooling-off policy,” which allows investors to rethink the “costs and risks” of financial products without the pressure from the sales team.
It is worth noting that in the Philippines, the Securities and Exchange Commission (SEC), its central bank (the Bangko Sentral ng Pilipinas), and Insurance Commission (IC) are allowed to create their “own standard” and laws, which fall under their jurisdiction.
At the end of the year, the Philippines SEC warned the public about using unlicensed cryptocurrency exchanges.
