The Securities and Exchange Commission said Thursday it issued a circular allowing crowdfunding portals to act as registrars of qualified institutional and individual buyer, as part of its efforts to boost the capital market.
A funding portal is an intermediary which facilitates transactions involving the offer and sale of crowdfunding securities through an online electronic platform.
The SEC said it issued SEC Memorandum Circular No. 12, Series of 2023 to include funding portals to the list of authorized registrars, provided they applied and complied with the registration requirements under the Securities Regulation Code.
“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 chairperson Emilio 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.”
The primary purpose of a registrar is to evaluate the qualifications of a natural or juridical person in their application as qualified buyer.
It also maintains and makes available for inspection by the SEC’s representatives a registry book of qualified buyers, which is a similar function already exercised by crowdfunding intermediaries that registered to act as registrar of qualified buyers.
As an authorized registrar, crowdfunding intermediaries and funding portals will no longer be reliant on third party institutions to assist potential investors with their application as qualified buyers.
Micro, small and medium enterprises could raise up to P50 million in capital within a 12-month period from the investments from qualified buyers.
The SEC has been encouraging MSMEs and start-ups to consider crowdfunding as a source of capital during its recent nationwide roadshow.