Crowdfunding is an exemption to the requirement that securities cannot be sold or offered for sale within the Philippines without a registration statement filed with and approved by the Securities and Exchange Commission (SEC). Under the Crowdfunding Rules, an issuer may offer or sell securities, provided that:
1. The issuer is an entity organized under the laws of the Philippines or a Filipino natural person, and accredited and/or accepted by a crowdfunding intermediary to utilize its platform. [See Issuer requirements in crowdfunding]
2. The aggregate amount of securities that can be offered and sold by issuer within a 12-month period shall comply with the following limits:
- i. Offering of securities with an aggregate value of up to P10M within a 12-month period can be offered and sold to any investor;
- ii. Offering of securities with an aggregate value of above P10M but not exceeding P50M, within a 12-month period can only be offered and sold to Qualified Investors.
3. The aggregate amount of securities sold to any investor across all issuers in securities crowdfunding during the 12-month period shall not exceed the following limits set forth:
- i. Retail Investors with income of up to P2M per year may purchase securities through a Crowdfunding Intermediary in a maximum value of 5% of their total income per year.
- ii. Retail Investors with income of more than P2M per year may purchase securities through a Crowdfunding Intermediary in a maximum value of 10% of their total income per year.
- iii. Qualified Investors are not subject to the limits set forth above.
4. The issuance of securities is conducted through an intermediary that complies with the requirements for intermediaries and the related requirements under the Crowdfunding Rules, and the issuance of securities is conducted exclusively through the intermediary’s platform. Similar crowdfunding done through medium other that online electronic platform may not avail of this exemption from registration of securities.
For purposes of calculating aggregate amount of securities offered and sold by an issuer and determining whether an issuer has previously sold securities within a 12-month period, “issuer” shall include all entities controlled by or under common control with the issuer and any predecessors of the issuer.
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