Philippines securities regulator accuses global trading app eToro of violating local laws by selling unregistered products.
The online trading platform eToro finds itself in hot water with regulators in the Philippines. According to an advisory issued by the country's SEC in March, eToro is accused of offering unregistered securities and operating without the required licenses.
Despite being a registered broker-dealer in various jurisdictions globally, the SEC maintains that eToro has not met the necessary requirements to legally offer its services in the Philippines.
“Based on the Commission’s database, the operator of the platform ETORO is NOT REGISTERED as a corporation in the Philippines and OPERATES WITHOUT THE NECESSARY LICENSE AND/OR AUTHORITY to sell or offer any form of securities as defined under Section 3.1 of the Securities Regulation Code (SRC), to engage in the business of buying or selling securities or as a broker or dealer as provided under Section 28 of the SRC, or to create or operate an exchange for the buying and selling of securities as provided under Section 32 of the SRC,” said the Philippines Securities and Exchange Commission.
The wildly popular eToro platform, which boasts over 30 million registered users worldwide across 140 countries, is a hit, especially in the UK, Europe, US and Australian markets. However, its Philippine operations have landed the company in the SEC's crosshairs.
According to reports from February, eToro was seeking a valuation of over $3.5 billion as it weighed a potential US listing. But its regulatory tangle in the Philippines casts some uncertainty over those plans.
The SEC advisory carries a stern warning - any individuals representing eToro as salespeople, promoters, influencers or agents could face penalties of up to 5 million Philippine pesos ($88,300) in fines or 21 years imprisonment for violating securities laws.
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