The Securities and Exchange Commission said it will hold a second round of public consultations and finalize the rules on initial coin offering this year.
The regulator said in a notice posted on its website that concerned parties would have until Jan. 15 to submit their comments and inputs.
ICOs refer to distributed ledger technology fundraising operations involving the issuance of tokens in return for cash, other cryptocurrencies or other assets. They involve coins (or tokens) being issued in order to raise money from the general public through online platforms.
“Considering that the enhanced interest in the proposed rules, the Securities and Exchange Commission resolved to subject the proposed rules on Initial Coin Offering to a second round of public consultations,” the SEC said.
“Hence the commission is inviting banks, investment houses, and other parties to submit their views, comments and inputs to the said proposed rules and guidelines which are revised based on the comments received during the previous round of public consultation,” it said.
The proposed rules are benchmarked from the rules in various jurisdictions and markets.
Under the draft circular issued in August, the SEC will assess an ICO in two stages: the initial assessment and registration proper.
The initial assessment will require ICO proponents to prove that the tokens they have are not security tokens. Security tokens are defined as “payment, utility, and/or asset tokens that satisfy the definition of securities under the Securities Regulation Code, its implementing rules and regulations, and other issuances of the SEC.”
Several ICOs conducted prior to the release of the draft rules claimed that the tokens issued were not securities and should not be under the jurisdiction of the SEC.
The SEC said that once it found that the tokens were securities during the initial assessment stage, it would order the proponent to register the coins and proceed to registration proper.
The issuer will be required to submit documents providing the name, address, contact details and brief description of the corporate background of the issuer, problems in the Filipino market that the proposed ICO looks to solve, the use of the funds to be generated from the ICO, timetable of the ICO campaign and the target market and risks in participating in the ICO.
The issuer will also be required to submit an audit report issued by an independent code auditor, including the results of the testing of the source code, technology risks and security protocols.