SEC inks partnership with UP Law Center on cryptocurrency, fintech regulation

THE Securities and Exchange Commission’s (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 conduct of joint research and capacity-building projects focusing on cryptocurrency and financial technology (fintech) regulation.

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

It is important to highlight the key focus of the commission, which is digitalisation, as well as how we continuously seek to help enable innovation through regulation. New technologies and the regulation of new technologies often come with a lot of challenges and risks. Therefore, it is critical 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 terms of introducing innovative financial technology into our local markets through different research topics, focus group discussions and public forums that will be conducted under this project.

SEC Chairman Emilio Aquino noted in his message on the MoU signing that, “The UPLC, especially the Institute of Government and Law Reform, is the premier agency in research initiatives for 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 emerging technology called the blockchain.”

“However, we strive to serve the Filipino the best way possible — that is why we are motivated to issue rules addressing cryptocurrencies and blockchain technology, specifically for the issuance of digital assets and the regulation of digital asset exchanges. We were about to issue these rules, but the crash of several digital asset companies compelled us to revisit them. We just can’t discount the key information that led to their downfall. The research of the UPLC will be vital to the crafting of these regulations, and in guiding us for future regulations. We are grateful for this partnership and may this bring a fruitful regulatory ecosystem for the space,” he added.

As signatory to the MoU, UP College of Law Dean Edgardo Carlo Vistan 2nd mentioned said that consistent 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 times characterized by accelerated change.

On behalf of UP, the UP College of Law and the UPLC, Vistan commended the SEC for being proactive in addressing these challenges brought about by new technologies that enable more efficient ways of transacting business acting, especially in defense of the investing public without hampering growth . The PhiliFINNO, established in July 2021 under the Office of the SEC Chairman, is a signal of the commission’s proactive stance.

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

Having this partnership come to fruition, I would like to send my warmest congratulations to the SEC, under the leadership of Aquino, and through the collaborative efforts of our office and the PhiliFINNO, for the successful signing of this MoU. More importantly, I wish 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 stated herein are his own. You may email your comments and questions to [email protected]