The Philippine Chamber of Commerce and Industry (PCCI), the Philippine Young Entrepreneurs Association (PYEA), and Round One recently conducted their fourth webinar series on crowd investing aimed to discuss building generational wealth.

 

Krizia Ferrer, Securities Examiner of the Securities and Exchange Commission presented the various forms and platforms, benefits and risks, and, existing rules and regulations for crowdfunding in the country.  She defined crowdfunding as a collective effort of individuals who pool their resources to support initiatives promoted by other people or organizations.

 

Ferrer explained that in traditional funding, there are minimal interactions between customers before the products are presented.  In comparison to crowdfunding, investors are able to provide feedback and communicate with owners/developers before the launch.

 

The four different types of crowdfunding, she added are donations, rewards, equity, and debt.  Donation and rewards have no actual profit in return.  Only equity and debt are considered financial return crowdfunding.  Equity means that in exchange for investment, the investor gets ownership stake.  When an investor loans with interest, this can be classified as debt.  Equity based crowdfunding is highly dependent on securities regulation in host jurisdiction.

 

Crowdfunding rules depend on the category of funder.  For a crowdfunding issuer, transactions must be done through registered platforms such as Investree, SeedIn, and Round One.  In addition, disclosure of annual reports and progress updates is required by law. The rule for crowdfunding intermediary applies to investment brokers, investment houses, and funding portals.  Due diligence, risk assessment, reviews, and other relevant information such as issuer information must be provided.  Lastly, investors have distinct regulations depending on their annual income.

 

In the panel discussion, Ferrer was joined by Atty. Raymond Rodis, Round One Legal Consultant; Mr. Edison Tsai, SeedIn Executive Director; and Mr. Brandon Leong, Round One Business Unit Lead.  These experts talked about the process, advantages, risks, and their own experience about the topic.   The panelists agreed that they cannot be lax when it comes to the rules and regulations set by the SEC.  Atty. Rodis stated that it is a legal obligation to the government in order to protect the parties involved.

 

Mr. Leong mentioned crowdinvesting is a portal to an alternative investment.  Accordingly, a platform that is regulated gives the investor a magnifying glass when it comes to scanning opportunities.  He cited Mr. SeedIn, an app developed by Mr. Tsai that matchmakes businesses and investors to help them find a regulated environment to meet both their needs.

 

In the end, the team of experts reminded viewers that Crowdinvesting requires intensive research to know your risk appetite, social impact, and information about the management. This is necessary to make an informed decision as an investor.  --- Athena Quizon

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