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NON-REGISTERED FOREIGN ENTITIES ORGANIZATIONS AND CORPORATIONS

The Securities and Exchange Commission (SEC) urges the public to be careful
when
dealing
or transacting
with
corpora
tions
or entities
that are not licensed or
registered in the Philippines.
The
SEC
has received numerous inquiries regarding the implication
s
of
transacting with non
–
registered foreign
corporations and entities
whose products or
services are reachable
in the Ph
ilippines
through
their website or
online
app
s
and
platforms.
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
regist
ration
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:
a.
Foreign C
urrency (
Forex
)
Brokers and Exchanges
b.
Digital Asset/Cryptocurrency
/Virtual Asset
Exchanges
c.
Decentralized Finance (DeFi)
Investment
Platforms
d.
Yield Farming/Staking Platforms
e.
Multi
–
asset/Multi
–
security Brokerage Companies
f.
Websites for Securities Token
Offerings/Token Generation Events
g.
Illegal Investment Scheme websites
h.
Binary Options
Trading
apps
i.
Pay
–
to
–
Click/Captcha websites
j.
“Play
–
to
–
Earn Gaming” platforms
k.
Various fiat/cryptocurrency gambling websites
l.
Various cryptocurrency
–
related investment
websites
The public is remind
ed 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. 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 you
still
decide to
transact with
these entities and use their apps or platforms
, the public is
informed and
advised
of the following:
a.
Protection offered against registered corporation
s and entities
.
Dealing
or
transacting
with registered domestic corporations o
r
foreign corporation
s
with regist
ration to do business as a branch, regional operating/area
headquarters or
representative office
within the Philippines
assure
s
domestic parties
that they
are
duly protected by Philippine Law
s
.
I
n case
of any
future
conflict
with
the
corporation
or entity
arising out of brea
ch of
contractual obligations or in case of any
fraud or
misconduct
committed by the
registered foreign party
which
lea
ds
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.
b.
Risks of putting your
earnings
in
unregistered corporations and entities or their
platforms.
If you put your
earnings
i
n 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
protect
ion
from any harm, damage, fraud or
any form of
misconduct which
may be caused or committed by these
corporations or
entities.
Jurisdiction
over fraud or any form of misconduct committed by these corporations fall
s
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
rememb
er 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
.
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, you may send your queries or concerns via email
to the PhiliFintech Innovation Office at fintech@
sec.gov.ph

NON-REGISTERED FOREIGN ENTITIES ORGANIZATIONS AND CORPORATIONS