SEC plans to expand investment options, revise REIT rules

The Securities and Exchange Commission (SEC) has announced plans to expand investment options, revise real estate investment trust (REIT) rules, and simplify regulatory transactions to strengthen the Philippine capital market.

To improve market accessibility, the SEC plans to create a roadmap for alternative investment products and derivatives, including options, futures, and a potential commodity futures market, to enhance risk management and offer more investment options, it said in a statement on Thursday.

At the same time, the commission is looking to implement regulatory reforms that will empower local corporations to tap global indices for funding and revise the implementing rules and regulations (IRR) of Republic Act No. 9856, or the REIT Act, to better meet market demands as part of deepening the capital market.

“The SEC also vowed to leverage risk-based audits, enhanced digital monitoring tools, and continuous institutional capacity building to strengthen its oversight over the corporate sector and the capital market, as well as its investor protection capabilities, in line with global best practices,” it said.

On improving ease of doing business, the SEC is considering the imposition of a moratorium on fee increases for a specified period to allow wider access to corporate data.

It will also launch a real-time digital tracking system to reduce client follow-ups and boost transparency.

The SEC recently issued Memorandum Circular No. 6, which lowered the fees and charges for corporate data requests by 50% since July 1 to boost corporate data access.

The corporate regulator said it may also streamline the registration process for small and medium enterprises and open the repurchase market to non-bank financial institutions (NBFIs).

“To improve consumer protection and support the growth of NBFIs, the SEC will intensify its crackdown against illegal lending by reinforcing its supervisory authority to promote and ensure compliance with truth-in-lending disclosure, fair lending standards, and the prohibition of abusive collection practices,” the SEC said.

The planned initiatives were raised during the courtesy visit of SEC officials, led by SEC Chairperson Francisco Ed. Lim, to Finance Secretary Ralph G. Recto on June 23. Mr. Lim shared the SEC’s priorities to improve the country’s capital market and business sector.

“The SEC is ready to work with the Department of Finance, under the leadership of Secretary Recto, to create a conducive environment that will encourage business formation and boost participation in the capital market,” Mr. Lim said.

“The SEC remains steadfast in its commitment to transform the Philippine corporate sector into one of the best in Southeast Asia by fostering an inclusive capital market, capable of strongly contributing to overall economic growth and nation-building,” he added.

Mr. Lim previously said that he is eyeing to reduce backlogs and streamline transaction requirements to ensure the proper implementation of Republic Act No. 11032, or the Ease of Doing Business and Efficient Government Service Delivery Act.

He also committed to efficiently implement Republic Act No. 12214, or the Capital Markets Efficiency Promotion Act, which lowered the tax rate for capital market-related transactions.

Mr. Lim also vowed to strictly enforce the SEC’s newly issued rules on crypto-asset service providers and their operations to ensure market integrity and boost investor protection.

China Bank Capital Corp. Managing Director Juan Paolo E. Colet said in a Viber message that the planned reforms are targeted across key mandate areas, which could transform the country’s capital markets.

“Certain proposals are potentially transformative for the capital markets, including the push for alternative investment products and derivatives, the creation of a commodity futures market, and the empowerment of local corporates to tap global indices for funding,” he said.

“We expect the SEC to proactively engage market participants and stakeholders to get the best input for crafting and implementing these reform initiatives,” he added.

Jayniel Carl S. Manuel, Seedbox Securities, Inc. sales and trading department assistant manager, said in a Viber message that the SEC’s planned reforms, if realized, could broaden the market and give more tools for investors.

“These are exciting moves from the SEC. The digital tracking system alone is a game-changer for transparency and efficiency,” he said.

“The planned REIT IRR update and the introduction of derivatives and alternative investments are also great steps and a big plus for portfolio diversification and risk management,” he added.

Mr. Manuel said the planned moratorium on fee increases could help improve the efficiency of the local market.

“In the long run, easier access to corporate data can drive better-informed investment decisions, foster innovation in analytics tools, and ultimately contribute to market efficiency,” he said.

“It’s a step in the right direction, especially as the industry evolves in a more digital and democratized direction,” he added.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message that the new investment options will help meet the changing needs of investors and update the available investment products in the country.

“The introduction of more innovative investment products for more sophisticated investors will help better cater to their requirements and provide more investment alternatives, while having the risk management solutions based on global best practices to further protect and uphold the interest of the investing public,” he said. — Revin Mikhael D. Ochave, Reporter