The Securities and Exchange Commission drafted the rules governing the establishment of a digital asset exchange to facilitate the trade of cryptocurrencies or digital tokens for other assets.
The SEC said the issuance of draft rules on DAE was in line with its policy to encourage investments and active public participation in the capital markets.
The SEC said having a DAE would work toward the development of the Philippine financial market by allowing access to safe, transparent, reliable and cost-effective manner, while ensuring reduced and managed counterpart settlement risk and market price discovery.
A DAE is an organized marketplace or facility that brings buyers and sellers together and executes trades of securities in an online exchange platform accessible in or from the Philippines.
It can be viewed as an online marketplace for the entire digital asset network.
Under the draft rules, a DAE should maintain an unimpaired paid-up capital of P100 million at all times. It should establish systems and controls to ensure affairs are managed effectively and responsibly.
A DAE, which will act as a self regulatory organization, has the power to implement its own rules and regulations, including but not limited to defining its structure, trading in its platform, price discovery, clearing and settlement procedures.
It must have its privacy policies, security protocols, qualifications and disqualifications of issuer-members, users and other market participants, listing requirements and procedures, ethical conduct of its participants, supervision, control and disciplinary procedures and sanctions, fees and appeal procedures.
The move of the SEC to allow the establishment of an exchange for trading of digital assets is also in line with its move to allow initial coin offerings (ICO) in the country.
The SEC is currently finalizing the rules on ICO offerings, which are to be released in the second half of the year.
It said it would solicit comments from broker-dealers, investment houses, investing public, and other interested parties on the draft rules of DAE.
