In the digital age, the Philippine financial landscape has seen a surge in online investment platforms, crowdfunding sites, and digital lending apps. However, this growth has been accompanied by a rise in sophisticated investment scams. For any investor or consumer, the first line of defense is verifying whether a financial website is operated by a corporation duly licensed by the Securities and Exchange Commission (SEC) of the Philippines.
Under the Securities Regulation Code (SRC) and the Revised Corporation Code, operating a financial entity that solicits investments from the public without proper registration is a criminal offense.
1. Understanding the Two-Tiered Licensing System
It is a common misconception that a simple "SEC Registration" allows a company to solicit investments. In the Philippines, a financial website must generally possess two distinct levels of authorization:
- Primary Registration (Certificate of Incorporation): This gives the entity a "juridical personality." It means the company exists legally, but it does not grant authority to engage in specialized financial activities like lending or investment solicitation.
- Secondary License (Certificate of Authority/Permit to Sell): This is the critical requirement for financial websites. Entities such as lending companies, financing companies, investment houses, and brokers must obtain a Secondary License. For those selling securities, they must also have a Permit to Sell Securities.
2. Step-by-Step Verification Process
To ensure a website is legitimate, follow these official verification protocols provided by the Commission:
A. The SEC Company Registration System (CRS)
The primary tool for verification is the SEC Check App or the official SEC website (sec.gov.ph).
- Access the SEC List of Registered Corporations.
- Search for the exact corporate name listed in the website’s "About Us" or "Terms and Conditions" section.
- Warning: Fraudulent websites often "clone" the names of legitimate, registered companies. Always cross-reference the SEC registration number.
B. Verification of Secondary Licenses
If the website offers loans, investments, or trading, you must verify them against specific lists:
- Lending/Financing Companies: Check the "List of Lending Companies and Financing Companies with Certificates of Authority."
- Investment Solicitors: Verify if the company is on the list of "Registered Brokers and Dealers" or "Investment Houses."
- Crowdfunding: Check the list of authorized "Crowdfunding Intermediaries."
C. The "SEC Advisories" Section
The SEC regularly issues Advisories against entities found to be soliciting investments without a license. Before committing funds, search the "Advisories" tab on the SEC website for the name of the website or its operators.
3. Red Flags of Unlicensed Financial Websites
The SEC often warns the public against websites displaying these characteristics, which frequently point to "Ponzi" or "Boiler Room" operations:
| Red Flag | Legal Implication |
|---|---|
| Guaranteed High Returns | Legitimate investments always carry risk; "guarantees" often violate the SRC. |
| No Physical Office | Under the Revised Corporation Code, a principal office address is mandatory. |
| Payment via Personal Accounts | Licensed firms use corporate bank accounts, not personal GCash or Maya accounts. |
| Recruitment Incentives | If profits depend on "referrals," it may be an illegal Multi-Level Marketing (MLM) scheme. |
4. Legal Recourse and Reporting
If a financial website is found to be operating without the necessary licenses, it violates Section 8 of the Securities Regulation Code, which prohibits the sale or distribution of securities without a registration statement duly filed and approved by the Commission.
How to Report:
- Enforcement and Investor Protection Department (EIPD): You may file a formal complaint or send an email to
epd@sec.gov.phproviding the website URL, screenshots of the offer, and any evidence of transactions. - Cybercrime Prevention Act: Since these activities occur online, victims may also seek assistance from the PNP Anti-Cybercrime Group (ACG) or the NBI Cybercrime Division.
5. The "Check the App" Rule
For digital lending platforms (DLPs), the SEC specifically requires that the name of the Lending Company and its Certificate of Authority (CA) Number be clearly displayed within the app and on the website. If a financial app is not linked to a licensed corporation with a valid CA number, it is operating illegally under the Lending Company Regulation Act of 2007.