The Philippines is about to present new regulations allowing startups to legitimately raise funds through initial coin offerings (ICOs).
All Tokens Are Securities Expect When They Are Not
Before the regulations go into effect, the country’s Securities and Exchange Commission (SEC) is waiting for the people’s feedback concerning the draft rules published on Thursday, August 2nd.
All tokens issued in ICOs are assumed to be securities by default until the issuers prove otherwise. In the press release, SEC commented that “the proponents of such [conducted in the Philippines] ICOs claim that the tokens being issued are not securities and therefore not under the jurisdiction of the SEC. Allowing this practice is proven dangerous to the investing public who are left with no clear recourse once the said ICOs are proven to be scams.”
Required Procedures to Conduct an ICO
Organizations registered in the Philippines and willing to complete a token sale will be asked to present an initial assessment to the SEC no less than 90 days before the issuance.
Aside from details of the team, – names, ages and resumes, – the document will have to include a review of the ICO proposition and its credibility, and in addition – a legal opinion provided by an independent third party to demonstrate that the token isn't a security. Then, the SEC will decide whether the proposed ICO is a security issuance or not.
The published document additionally clarifies that ICO issuers can keep on working on their project regardless of the SEC deeming it a security issuance, as long as they complete a registration procedure and get approved by the regulator before the token sale begins.
In case an ICO is issued to a maximum of 20 people or limited to institutional investors like banks, insurance, and venture companies, it could be relieved of the requirement.