The Securities and Exchange Commission (SEC) has empowered crowdfunding portals to act as registrars of qualified institutional and individual buyers as part of broader efforts to boost the domestic capital market.
Prior to this, only the traditional financial intermediaries were authorized to act as registrars under the implementing rules and regulations of Republic Act No. 8799, or the Securities Regulation Code.
The SEC issued Memorandum Circular 12-2023 amending Section 39.1.4.1 of the IRR.
The amendment appends funding portals registered under SEC Memorandum Circular 14-2019 or Rules and Regulations Governing Crowdfunding, to the list of authorized registrars, provided they have applied and complied with the registration requirements of the SRC IRR.
A funding portal is an intermediary that facilitates transactions involving the offer and sale of crowdfunding securities through an online electronic platform.
The registrar evaluates the qualifications of a natural or juridical person in their application as qualified buyer. It maintains and makes available for inspection by agency representatives a registry book of qualified buyers, which is a function already exercised by crowdfunding intermediaries that registered to act as registrar of qualified buyers.
The registrar’s functions complement the functions of a crowdfunding intermediary. By being listed as authorized registrar, crowdfunding intermediaries and funding portals no longer rely on third party institutions to assist investors with their application as qualified buyers. “Recognizing crowdfunding portals as eligible to act as registrar of qualified buyers will facilitate the process for qualified investors in accessing alternative investment opportunities, without the need to reach out to several different institutions,” SEC chairman Emilio B. Aquino said.
“This is in line with our efforts to encourage more people to tap alternative sources of funding and investment as we seek to unlock the full potential of the Philippine capital market,” he said.
Micro, small and medium enterprises could raise up to P50 million capital over a 12-month period from the investments of qualified buyers.
The SEC has pitched crowdfunding as a source of capital for MSMEs and start-ups through nationwide roadshows.
It has completed stops in Davao, Cebu, Cagayan de Oro, Zamboanga, Iloilo, Manila, and Tarlac-Clark, with more to be conducted in Baguio, Legaspi and Tacloban for the rest of the year.
