The brokerage firm eToro regulated by authorities in the United Kingdom, Europe, Australia, Gibraltar and the US has no business selling its services in the Philippines, the Securities and Exchange Commission (SEC) said on Wednesday.
Even though eToro has has 10 offices worldwide, including centers in the US, UK, Israel, Cyprus and Australia, the SEC still flagged its domestic activities attracting local investors and making them invest in overseas-listed securities.
The SEC said in a note that eToro is not authorized to sell or offer securities to the public in the Philippines at all.
“eToro offers a crypto exchange that supports trading in 30 plus cryptocurrencies and an exchange for trading commodities, currencies, indices, as well as an online brokerage platform with a limited selection of stocks and exchange-traded funds,” the SEC said.
It also offers investors fractional investing where investors enjoy the same ownership benefits as whole share buyers, a practice allowed in the US.
The regulator said eToro has launched promotional campaigns in various social media websites and apps encouraging Filipinos to trade using its platform.
It said that while eToro is a registered broker/dealer in different jurisdictions, it first has to register and be licensed by its office in the Philippines before selling securities and investment products to the public.
Apart from SEC registration, issuing entities have to have a secondary license to sell or offer securities to the public.
“Based on the commission’s database, the operator of the platform eToro is not registered as a corporation in the Philippines and operates without the necessary license and/or authority to sell or offer any form of securities,” the SEC said.
It asked the investing public to “exercise caution before investing in these kinds of unregistered online investment platforms and their representatives.”
The SEC also warned that individuals or parties acting as salesmen, brokers, dealers or agents, representatives, promoters, recruiters, influencers, endorsers, and enablers of the eToro platform face jail time as long as 21 years or a fine of P5 million.
