The Securities and Exchange Commission (SEC) is warning the public to be careful when dealing or transacting with corporations or entities that are not licensed or registered in the Philippines.

The SEC said it has received numerous inquiries regarding the implications of transacting with non-registered foreign corporations and entities whose products or services are reachable in the Philippines through their website or online apps and platforms.

32203

By law, an entity is required to register and obtain a primary registration with the SEC if they intend to conduct business in the Philippines.

A number of these unregistered corporations and entities allow Filipinos to access their online platforms and permit the enrollment, creation, or registration of client accounts through online means despite having no registration or license to do business in the Philippines.

In some cases, Filipinos are even targeted by their aggressive online advertisements in various social media networking sites like Facebook, YouTube or Instagram.

Such unregistered online platforms include, but are not limited to, the following:

Foreign Currency (Forex) Brokers and Exchanges

Digital Asset/Cryptocurrency/Virtual Asset Exchanges

Decentralized Finance (DeFi) Investment Platforms

Yield Farming/Staking Platforms

Multi-asset/Multi-security Brokerage Companies

Websites for Securities Token Offerings/Token Generation Events

Illegal Investment Scheme websites

Binary Options Trading apps

Pay-to-Click/Captcha websites

“Play-to-Earn Gaming” platforms

Various fiat/cryptocurrency gambling websites

Various cryptocurrency-related investment websites

“The public is reminded to be vigilant and to do their due diligence prior to transacting/dealing with any entity. The public is also advised to avoid transacting with corporations or entities without any registration or license to do business in the Philippines in order to avoid losing their earnings,” said the SEC.

It added that, “If an entity or an activity is unlicensed or unregistered and is based abroad, you run the risk of not getting your money back once these are transmitted outside of the Philippines.”

However, should someone still decide to transact with these entities and use their apps or platforms, the SEC noted that dealing or transacting with registered domestic corporations or foreign corporations with registration to do business as a branch, regional operating/area headquarters or representative office within the Philippines assures domestic parties that they are duly protected by Philippine Laws.

In case of any future conflict with the corporation or entity arising out of breach of contractual obligations or in case of any fraud or misconduct committed by the registered foreign party which leads to criminal prosecution, parties may avail of remedies under Philippine Laws by filing their claims or complaints with our local courts having jurisdiction over the same.

“If you put your earnings in a platform which is reachable in the Philippines, but is operated by non-registered corporations or entities, the government can offer very limited protection or, in some cases, no protection from any harm, damage, fraud or any form of misconduct which may be caused or committed by these corporations or entities,” the SEC pointed out.

This is because jurisdiction over fraud or any form of misconduct committed by these corporations falls under the jurisdiction of the foreign country where they operate.

Domestic participants would have to go to the country where these platforms are registered and where they operate to file the appropriate complaint in order to seek redress.

“Always remember that in case of doubt as to whether or not it is safe to transact with an online platform or entity, always #CheckWithSEC if the corporation or entity is registered or not,” said the SEC.

The SEC’s website, www.sec.gov.ph, provides useful information on company registration, registration statements, secondary licenses, advisories, investor protection and investments.

At the SEC, the public may send your queries or concerns via email to the PhiliFintech Innovation Office at fintech@sec.gov.ph.


Source: Manila Bulletin (https://mb.com.ph/2021/09/13/sec-warns-about-dealing-with-foreign-firms-online/?utm_source=rss&utm_medium=rss&utm_campaign=sec-warns-about-dealing-with-foreign-firms-online)