In recent news, the Securities and Exchange Commission (SEC) has taken action against unregistered online lending platforms (OLPs) operating in the Philippines. According to reports, the SEC removed 33+ unregistered OLPs from the Google Play Store for violating the SEC’s disclosure requirements. This move comes in the wake of increased government oversight of the country’s online lending industry, which has grown significantly over the past few years.
The SEC’s action against the unregistered OLPs sends a clear message to the lending and financing companies operating in the country. Financing and lending companies are obligated to register their apps as business names and provide their corporate names, SEC registration numbers, and certificate of authority numbers in their apps and advertisements. Failure to adhere to these disclosure requirements could result in an OLP being removed from the Google Play Store, as has been the case with these unregistered platforms.
Moreover, the regulator’s move is in line with its commitment to protect consumers and ensure a level playing field for all industry participants. The SEC’s mission is to promote market transparency, stability, and the protection of investors. This is a crucial mandate given the rapid growth of the digital lending industry in the country.
It is also worth noting that the SEC’s recent action is not an isolated move. Indeed, the regulator has been implementing several measures to ensure that the online lending industry achieves its full potential without exposing consumers to unnecessary risks. For instance, in May 2022, Google implemented a new policy requiring developers with personal loan apps that target users in the Philippines to submit a Personal Loan App Declaration and other necessary documentation before publishing apps on Google Play Store.
As the online lending industry continues to grow in the country, there is a need for adequate regulation in line with the best practices in other countries. Increased regulation will not only protect consumers but also encourage more lenders to enter the market, boost financial inclusion, and support the country’s financial system.
In November 2021, the SEC introduced Memorandum Circular No. 10, Series of 2021 (SEC MC 10), which imposed a moratorium on registering new OLPs. As per SEC MC 10, only OLPs that were registered on or before November 2, 2021, may operate and be used for online lending or financing. This requirement is intended to prevent unregistered online lending platforms from entering the market, which could put consumers at risk.
The SEC has been diligent in enforcing its regulations for the industry, serving over 2,084 lending and financing firms with revocation notices due to their failure to obtain necessary certificates of authority. Moreover, the CA of 39 financing and lending companies was canceled due to various violations. These actions underscore the regulator’s commitment to ensuring that the online lending industry operates in compliance with relevant regulations.
The SEC’s commitment to adequate oversight of the online lending industry in the Philippines is commendable. The regulator’s measures safeguard consumers and ensure that lending and financing firms conduct their operations in a transparent and accountable manner. At the same time, the SEC’s regulations protect the integrity of the financial system, which is crucial for economic growth and development.
In conclusion, the SEC’s recent action underscores the importance of regulation in the fast-growing online lending industry in the Philippines. The regulator’s commitment to transparency, stability, and protecting consumers is commendable. The SEC’s regulations create a level playing field for all industry participants while ensuring that consumers are protected. The regulator’s continued vigilance and enforcement of regulations will ensure that the online lending industry in the Philippines achieves its full potential without exposing consumers to undue risks.