Fintech
SEC Still Bullish on Crowdfunding Platforms Despite Industry Setbacks
The Securities and Exchange Commission (SEC) remains bullish on digital crowdfunding platforms despite recent setbacks.
SEC Chairman Emilio Aquino recognized the challenges, declaring to the media,
“We have experienced the birth pangs. It is the same case for other jurisdictions like Indonesia and Malaysia. It is the same. So we are solving the issue, but that does not mean we are closing the doors in terms of the use of digital platforms.”
The SEC was support crowdfunding as an accessible and viable capital raising option for micro, small and medium enterprises (MSMEs) and startups to facilitate business expansion.
Fund-raisinga fundraising activity typically conducted by startups and SMEs, allows the public to support or finance a business idea through an online platform. SEC Chairman Emilio stressed the importance of digital crowdfunding platforms, stating,
“We want them to leverage, in particular, digital platforms because the general idea is that this will also allow SMEs to have capital raising opportunities for themselves.”
In the Philippines, there are currently three licensed crowdfunding intermediaries: SeedIn Technology Inc., Philippines investedAND Oriental Securities Development CompanyHowever, Investree, the country’s first crowdfunding intermediary and funding platform, has announced that it will cease operations.
Filinvest Development Corp. (FDC) recently said that its subsidiary f(dev) Digital Innovations and Ventures Inc. and Investree Singapore Pte. Ltd. have agreed to close Investree PhilippinesThe company will request a reduction in its term of office until September 30, 2025.
Since its founding in 2020, Investree Philippines has supported over 180 companies and funded over 800 applications across various sectors through 2023.
Meanwhile, the SEC has initiated a special audit on SeedIn following concerns about possible fraud committed by its former president, Edison Tsai. SowingIn reported Tsai’s involvement in a potential fraudulent act.
Emilio observed,
“We certainly learn from the reports, from the audits that we conduct to plug those possible loopholes. We are checking. But right now it is under review.”
Under SEC rules, crowdfunding SMBs are no longer required to register securities with the SEC or obtain approval directly from the SEC before soliciting public investment.