The Securities and Exchange Commission is giving crowdfunding portals authority to act as registrars of qualified institutional and individual buyers as part of the SEC'S efforts to boost the capital market.

The SEC has issued Memorandum Circular 12, Series of 2023, providing amendments to Section 39.1.4.1 of the implementing rules and regulations (IRR) of the Securities Regulation Code (SRC).

The amendment now includes registered funding portals in the list of authorized registrars, provided they have applied and complied with the registration requirements of the SRC IRR.

Only traditional financial intermediaries were previously authorized to act as registrars under the SRC IRR.

The SEC said that by being listed as an authorized registrar, crowdfunding intermediaries and funding portals would no longer be reliant on third party institutions to assist potential investors with their application as qualified buyers.

'Recognizing crowdfunding portals as eligible to act as registrar of qualified buyers will facilitate the process for qualified investors in accessing alternative investment opportunities, without the need to reach out to several different institutions,' SEC chairperson Emilio Aquino said.

'This is in line with our efforts to encourage more people to tap alternative sources of funding and investment, as we seek to unlock the full potential of the Philippine capital market,' he said.

A funding portal, according to the SEC, is an intermediary which facilitates transactions involving the offer and sale of crowdfunding securities through an online electronic platform.

The SEC said the primary purpose of a registrar is to evaluate the qualifications of a natural or juridical person applying as a qualified buyer.

The registrar also maintains and makes available for inspection by the SEC's representatives a registry book of qualified buyers, which is a function already exercised by crowdfunding intermediaries that registered to act as registrar of qualified buyers.

As such, the SEC said the registrar's functions would complement the current functions of a crowdfunding intermediary.

The SEC has been pitching crowdfunding as a source of capital for micro, small and medium enterprises and start-ups through nationwide roadshows.

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