SEC on guard vs insider trading

This undated file photo shows the Philippine Stock Exchange building in Taguig City.

Edd Gumban, file

MANILA, Philippines – The Securities and Exchange Commission is working on various initiatives to strengthen the capital market, including looking into reports of insider trading in the stock market, SEC officials said in a recent press conference.

SEC Commissioner Kelvin Lee said the Enforcement and Investor Protection Division (EIPD) has been closely monitoring the local market for insider trading.

“EIPD has been monitoring the market. We would appreciate it if the public has any reports as well. We have people monitoring. It has not been mentioned (there are findings). What has been mentioned is that there is monitoring, ” Lee said.

He said the main objective is to protect investors but at the same time keep the capital market alive.

The SEC is also in the process of issuing a framework for the issuance of digital assets in the Philippines. Lee said the intention is for the SEC en banc to get it out in the fourth quarter of this year.

“The actual implementation will probably be next year,” Lee said.


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SEC Chairman Emilio Aquino said regulators planned to release this earlier, but it had to be extra cautious after the collapse of Bahamas-based cryptocurrency exchange FTX in late 2022.

He said that while the SEC was ready to issue the guidelines at the end of last year, it decided to first investigate the reasons behind the collapse of FTX to add more safeguards to what would be a local framework for digital assets in the country.

FTX was the third largest cryptocurrency exchange by volume and had over a million users. It collapsed due to a liquidity crisis of the company’s token, FTT, which served as the impetus for its bankruptcy.

The SEC framework will cover regulations appropriate to cryptocurrencies and blockchain technology. The rules will also govern the issuance and regulation of digital asset exchanges. It will also ensure that such assets meet global standards of investor protection, market integrity and transparency.

Currently, the SEC has made use of laws and regulations tailored to traditional securities.

Aquino assured the public that the SEC believes in technology and what it can offer. He said regulators are simply making sure investors have safe investment options so they don’t fall prey to fraud.

To this end, the SEC has also entered into a Memorandum of Understanding with the Department of Migrant Workers (DMW) to promote financial literacy among Overseas Filipino Workers (OFWs) and help them identify potential investment scams.

Under the MOA, the SEC can tap the DMW’s existing OFW registry and through it better warn OFWs about entities illegally soliciting investments from the public.

Aquino said the SEC has been more vigilant as investment scammers have become more creative and aggressive in courting the public.

In 2018, the SEC issued an average of 25 warnings against investment fraud.

From 2020 to 2021, the number has increased to 150 advisers.

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