The Securities and Exchange Commission (SEC) has granted the country’s first permanent license to operate as a crowdfunding platform to Investree Philippines Inc.
The Commission En Banc approved Investree Philippines’ application for a permanent license to operate as a funding portal and act as a crowdfunding intermediary, following a review of the company’s operations since the issuance of its provisional license on Jan. 7, 2021.
Investree Philippines is a joint venture between Filinvest Development Corporation and Investree Singapore Pte. Ltd.
It is the first crowdfunding intermediary and funding portal registered with the SEC after the Rules and Regulations Covering Crowdfunding (CF Rules) took effect in July 2019.
The company operates a lending-based crowdfunding platform whose crowdfunding activities involve banks or qualified buyers as lenders, and small, medium, and emerging enterprises (SMEs) as borrowers.
As of Dec. 20, 2021, Investree Philippines’ crowdfunding portal has had a total of 43 issuers and one investor with 110 notes issued, for a total amount of P172.15 million.
The company had three investors during the same period, namely Investree Singapore, Andremere Holding Corporation, and Netbank (A Rural Bank) Inc.
The grant of the permanent license is part of the SEC’s efforts to promote crowdfunding as a suitable investment among Filipino investors and to provide more fundraising options for SMEs.
Crowdfunding is a fundraising activity typically conducted through an online platform for startups and small and medium enterprises.
It involves three parties: the entrepreneur or project initiator; the supporters or those willing to fund the business idea or project; and the platform or moderating organization that brings the entrepreneur and supporters together to realize the business idea or project.
Lending-based and equity-based crowdfunding activities involve the offer of securities in the form of debentures or shares, which means that they are subject to securities regulation in many jurisdictions.
In the Philippines, Section 8 of Republic Act No. 8799, or the Securities Regulation Code, provides that securities shall not be sold or offered for sale or distribution, without a registration statement duly filed and approved by the SEC.
However, CF securities may be exempted from registration, provided that the issuer, intermediary, and investors comply with the CF Rules.