SEC initiates collaboration with UP Law Center on cryptocurrency, fintech regulation

THE Securities and Exchange Commission (SEC) PhiliFintech Innovation Office (PhiliFINNO) has partnered with the University of the Philippines Law Center (UPLC), through the University of the Philippines Legal Center Research Program, for the implementation of joint research and capacity building projects focusing on regulation of cryptocurrency and financial technology (fintech).

The memorandum of understanding (MoU) for the partnership was signed on 19 January.

It is important to make visible the main focus of the commission, which is digitalisation, as well as how we continuously seek to contribute to enabling innovation through regulation. New technologies and regulation of new technology often come with many challenges and risks. Therefore, it is imperative that we understand these emerging technologies, anticipate their impact, and build a framework that does not stifle them.

I am confident that with this collaboration and joint effort, the SEC will gain a better understanding that will enable us to do far more in introducing innovative financial technology to our local markets through various research topics, focus group discussions and public forums that will carried out under this project.

SEC Chairman Emilio Aquino noted in his announcement of the MoU signing that “UPLC, especially the Institute of Government and Law Reform, is the premier agency in research initiatives on various aspects of the law as a basis for law reform by conducting technical research and studies in law. They are a very welcome partner of the SEC in decoding the complexities of this new technology called the blockchain.”

“But we strive to serve Filipinos in the best possible way — that’s why we are motivated to issue rules that address cryptocurrencies and blockchain technology, especially for the issuance of digital assets and the regulation of digital asset exchanges. We were in the process of issuing these. rules, but the collapse of several digital asset companies forced us to revisit them. We just cannot dismiss the key information that led to their downfall. The research of the UPLC will be critical to the design of these regulations, and to guide us for future regulations. We are grateful for this partnership and may this bring a fruitful regulatory ecosystem for space,” he added.

As a signatory to the MoU, UP College of Law Dean Edgardo Carlo Vistan 2nd mentioned that in accordance with its legal mandate, the UPLC welcomes this opportunity for collaboration with key government agencies, especially as they navigate new paradigms and tackle complex challenges in these troubled times of by accelerated change.

On behalf of UP, UP College of Law and UPLC, Vistan commended the SEC for being proactive in tackling these challenges caused by new technologies that enable more efficient ways of conducting business actions, especially to defend the investor public without inhibiting growth. PhiliFINNO, established in July 2021 under the office of the SEC Chairman, is a signal of the Commission’s proactive stance.

Finally, attorney JJ Disini, head of the UPLC Research Program, mentioned in his closing remarks that the recent events happening in the fintech space, especially the collapse of FTX and the domino effect that continues to this day, among other things, highlight the need for investor protection provided by proper supervision from a public body. He hoped that the project can help prevent and push the government towards a path that will allow this technology and space to thrive.

After this partnership has been realized, I would like to extend my warmest congratulations to the SEC, under the leadership of Aquino, and through the cooperation of our office and PhiliFINNO, for the successful signing of this MoU. More importantly, I want to congratulate and thank the University of the Philippines, UP College of Law and UPLC for their unwavering support to the SEC.

Kelvin Lester K. Lee is a commissioner of the Securities and Exchange Commission. The views and opinions expressed here are his own. You can send your comments and questions to [email protected]