SEC Drafts IRR Covering Crypto and Other Digital Products

The Securities and Exchange Commission (SEC) has drafted the  Implementing Rules and Regulations (IRR) of the Financial Products and Services Consumer Protection Act (FCPA or Republic Act No. 11765 which includes cryptocurrencies and digital products.

The SEC has released a statement saying that “The draft IRR will operationalize the newly signed law that aims to protect the interests of financial consumers by strengthening the country’s financial regulators by providing them with rule-making, surveillance, inspection, market monitoring, and more enforcement powers.”

Last May 2022, this measure was signed into law to guarantee that the mechanisms are aligned with the best global practices to protect the consumers of financial services and products.

The SEC, Insurance Commission (IC), and the Bangko Sentral ng Pilipinas (BSP) have the power to create their own rules and standard for applying the new law’s provisions within their jurisdiction.

The drafted rules will encompass all the financial service providers, services, and products which fall under the SEC’s jurisdiction.

The financial services and products to be covered are investments, securities, credit, digital financial services, and products which include those delivered and accessed via digital channels.

The drafted guidelines cover  “tokenized securities products,”  or those that use distributed ledger technology like cryptocurrencies.

The rules proposed would increase the enforcement actions that could be done by the SEC. This would include the restriction of the financial service provider to collecting excessive charges, fees, or interests, the suspension or disqualification of employees, officers, trustees, and directors, giving fines, penalties, or suspensions, issuing cease and desist orders, disgorgement, suspension of operations.

Source: Manila Bulletin