PHI SEC Crowdfunding Rules

On Jul. 9, PHI SEC approved rules on SME crowdfunding access.

  • Issued rules and regulations on crowdfunding, allowing startups and SMEs greater
    access to funding while providing the public with some more investment options.
  • The Commission En Banc on Jul. 4 approved the Rules and Regulations Governing
    Crowdfunding in accordance with Republic Act No. 8799, Securities Regulation Code.
  • Salient rules on crowdfunding
  • The CF Rules primarily govern the operation and use of equity- and lending-based
    crowdfunding by registered persons such as brokers, investment houses, etc.
  • Crowdfunding through means other than online electronic platform is not within the
    coverage of the CF Rules; hence, the usual requirements under the SRC shall apply.
  • Crowdfunding transactions must be done through registered CF intermediaries.
  • Limits
  • The aggregate amount of securities that can be offered and sold by issuer within 12
    months is P10mn when offered/sold to any investor; P10-50mn for qualified investor.
  • The aggregate amount of securities sold to any investor across all issuers in securities
    crowdfunding during the 12-month period shall not exceed the following limits.
  • For retail investors with annual income of up to P2mn, a maximum value of 5% of
    total income per year; and with annual income over P2mn, a maximum value of 10%.
  • Intermediary
  • A CF intermediary must disclose and display prominently on its platform, relevant
    information relating to its crowdfunding activities, such as issuer information, fees.
  • Must deliver educational materials to investors on process for the offer, purchase and
    issuance of CF securities, risks associated; types of securities available for purchase
  • Must provide on platform communication channels through which can communicate.
  • Other Points
  • An investor must be able to cancel an investment commitment for any reason until
    48 hours prior to the deadline identified in the issuer’s offering materials.
  • If an issuer does not complete an offering, an intermediary must direct the refund.
  • Issuers must submit annual reports and progress updates disclosing development.
  • Effectiveness
  • Any person or corporation currently engaged in equity-based and/or lending-based
    crowdfunding must comply with the CF Rules within three months of effectiveness.

Regulators PHI SEC
Entity Types B/D; Bank; Corp; IA
Reference PR, 7/9/2019
Functions Financial
Countries Philippines
Products Corporate; Equity; Fund Mgt; Securities
Regions AP
Rule Type Guidance
Rule Date 7/9/2019
Effective Date 7/9/2019
Rule Id 62455
Linked to N/A
Report Issue 7/15/2019
Report Section International

Last substantive update on 07/09/2019