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SEC readies new guidelines to further deepen capital market

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The Securities and Exchange Commission (SEC) is preparing new guidelines that will expand fundraising and investment opportunities in the Philippine capital market and, at the same time, strengthen the protection of investors and other financial consumers.

Before the year ended, the Commission released for public comment the proposed amendments to rules governing registrars of qualified institutional and individual buyers; the draft guidelines on crypto-asset service providers (SEC CASP Rules); the draft guidelines on Philippine Green Equity; the draft rules providing the definition of seasoned issuers and extension of shelf registration; and the draft rules for the issuance and disclosure of Sukuk bonds.

Draft rules on qualified institutional and individual buyers

On December 18, the SEC issued the second exposure draft of the amendments to Rule 39.1.4 of Republic Act No. 8799, or the Securities Regulation Code, or the Rules Governing Registrars of Qualified Institutional and Individual buyers.

The proposed amendments will reinforce the Commission’s authority to verify the procedures of authorized registrars in accrediting qualified buyers to ensure that they maintain regulatory oversight and compliance with market regulations.

The current rules provide that an authorized registrar shall establish its own internal procedures to guide its personnel in evaluating the qualifications of applicants for qualified buyer status. The amendments specify the requirements for the initiation and cessation of a qualified buyer’s function as a registrar, its responsibilities, and requirements to retain its registration, among others.

Comments on the draft Memorandum Circular on the Proposed Amendments to SRC Rule 39.1.4 may be submitted until January 10, 2025 through email at msrdsubmission@sec.gov.phjapsescar@sec.gov.ph, and gclagonoy@sec.gov.ph.

Draft rules on crypto-asset service providers

Released on December 20 for public comment, the proposed SEC CASP Rules aim to enhance the oversight and supervision powers of the SEC over businesses that involve the offering and trading, as well as other activities of innovative financial products.

The draft rules take into account the growth and development of new crypto-asset markets, services, and business models, as the Commission seeks to establish an affirmative legal framework to provide protection against consumer harms and systemic risks.

It also seeks to provide consumers the choice of engaging in crypto-asset activity with licensed and authorized intermediaries.

All interested parties have until January 18, 2025 to submit their comments on the draft SEC Rules on Crypto-Asset Service Providers through email at fintech@sec.gov.ph.

Draft rules on Philippine green equity

Released on December 26, the draft guidelines for Philippine Green Equity seek to promote the visibility and attractiveness of companies that actively support green activities and initiatives.

Green equity is a complement to sustainable debt instruments, expanding the range of sustainable investment products in the market and further support the transition towards a net zero carbon economy.

By identifying and recognizing businesses aligned with environmental and sustainability objectives, the green equity label aims to direct capital flows toward enterprises that contribute to building a climate-resilient and low-carbon economy, thereby supporting the country’s broader goals for sustainable development.

Interested parties have until January 25, 2025 to submit their comments and inputs on the draft Guidelines on Philippine Green Equity through email at msrdsubmission@sec.gov.phdebalonzo@sec.gov.ph, and pmllimosinero@sec.gov.ph.

Draft rules on seasoned issuers, shelf registration

The SEC also released on December 26 the proposed amendments to SRC Rule 3 and SRC Rule 8.1.2, covering the definition of seasoned issuer and enhanced shelf registration, respectively.

The draft guidelines will update the definition of terms to include seasoned issuer, which means any issuer designated by the Commission as having demonstrated its compliance with requirements on size, listing history, and track record.

The proposal also covers the extension of shelf registration granted to seasoned issuers, allowing them to extend the offering period for additional tranches of securities under beyond the original three-year period.

The Commission is accepting comments, suggestions, and inputs from all concerned for the draft rules on Seasoned Issuer and Enhanced Shelf Registration until January 26, 2025 through email at msrdsubmission@sec.gov.phgclagonoy@sec.gov.ph, and dlguardian@sec.gov.ph.

Draft rules on Sukuk bonds

Lastly, the Commission released on December 26 the proposed guidelines on the issuance and disclosure of Sukuk bonds.

The guidelines seek to further the administration’s agenda to promote the development of Islamic banking and finance in the country and to create the opportunity for other Philippine issuers to access the sukuk market in the future

Sukuk or Islamic bond is the most popular financial instrument in the Islamic capital market, representing an important avenue for international fundraising and investment activities generating significant cross-border flows globally.

Those interested may submit comments and suggestions on the draft Guidelines on the Issuance and Disclosure of Sukuk Bonds until January 26, 2025 through email at msrdsubmission@sec.gov.phgclagonoy@sec.gov.ph, and dlguardian@sec.gov.ph.

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