Philippines’ SEC assumes ICOs are securities

Author: Karry Lai | Published: 20 Aug 2018

The Philippines’ Securities and Exchange Commission’s (PSEC) is proposing draft rules on initial coin offerings (ICOs) that assume the underlying tokens are securities. It’s up to the issuer to prove to the regulator that the relevant offering isn’t a security, which could prove challenging.   

The regulator has adopted the same approach as its US counterpart, which held earlier this year that ICOs are securities subject to existing rules on investor protection and disclosure.

The principal requirement for applicants is to provide justification that the features of their tokens will not qualify as securities within the meaning of the Securities Regulation Code. Mark Gorriceta, partner at Gorriceta Africa Cauton & Saavedra explains that what makes this initial assessment process challenging is the submission of an extensive list of documents. This list not only requires applicants to dive deep into the features of the tokens but also...