The Philippine Star has reported that the country’s regulations have pushed forward the date for the issuance on new ICO (initial coin offering) to mid-January.
Unveiling of New ICO Rules Postponed
The initial expected period for the issuance of the regulations was the end of January. However, the Securities and Exchange Commission of Philippines has postponed the issuance to a later date that is yet to be confirmed. The report states that the deferment was as a result of industry stakeholders requesting for more time to go through the draft of the regulations. The regulator will be engaging the public till mid-January.
The initial draft of the ICO rules was released in August last year by the commission. Talk of a new draft of ICO rules had been in the grapevine for a while before the SEC officially confirmed it earlier on in the year, 2018.
At the time the Securities and Exchange Commission of Philippines was confirming there would be a new draft of ICO rules, its chief, Emilio Aquino, said that the new draft would be to the benefit of the investor. He said the new draft would be aimed at protecting the investor against fraud with special caution being taken to not limit innovation in the sector.
New requirements For Issuers Of ICOs
The new draft features new requirements that must be adhered to by any firm looking to hold an ICO. Among the requirements contained in the newly drafted rules include any firms seeking to conduct ICOs have to register with the SEC before the pre-sale begins. Another requirement is that all Philippine firms conducting ICOs within the country have to undergo assessment by the SEC to ascertain whether the tokens are considered securities or not.
In the event that the SEC determines that the tokens are securities, the issuer will have to register them under security tokens before the commencement of the pre-sale. This applied in the case where the ICO does not fall under the exemptions from registration stipulated in the rules, or is executed through crowdfunding exclusively.
The rules make it mandatory for Philippino firms planning an ICO to be incorporated while foreign firms conducting an ICO must have an office in the country.
Release of Funds Subject To Conditions
With the main aim of the new drafted rules being the protection of investors, the Securities and Exchange Commission of Philippines will be requiring the proceeds of the ICOs to be held in an Escrow account. Withdrawal of the funds will only be possible in the event that the issuer of the ICO has presented a work progress report. The escrow agent will then be able to release the funds to the investors if:
1.The ICO project was not able to reach the soft cap
2.The issuer of the ICO abandoned the project before its completion i.e in a pro rata basis.
The Philippine government seems to be making major strides in regulating the Crypto sector and promoting its growth. Earlier in the year, CEZA (Cagayan Economic Zone Authority) approved the issuance of licenses to nineteen crypto-based firms.