FinTech Alliance seeks to become a self-regulatory organization
FINTECH ALLIANCE.PH wants to become a self-regulatory organization (SRO) in two to three years, officials said on Tuesday.
“We haven’t actually applied, but we are already practicing it. It’s just that it’s quite tedious to actually complete the application… We are actually prepared to formally have that SRO status, though I think we have two more years, almost three more years to do that. But I think we can already apply for that,” FinTech Alliance.PH Trustee Imelda C. Tiongson said in a media briefing on Tuesday.
The group will apply for an SRO license with the Securities and Exchange Commission (SEC), she said.
Under the Securities Regulation Code, an SRO is an organization or association that is allowed to make and enforce its own rules among members. Both the Philippine Stock Exchange and Philippine Dealing Exchange Corp. are licensed as SROs.
Ms. Tiongson said FinTech Alliance.PH is very strict in regulating its own members, going as far as kicking out those who pose risks to the industry.
“We actually expelled two members — these are online lending companies — for gross violations of the Data Privacy Act,” Fintech Alliance.PH Chairman and Rizal Commercial Banking Corp. Executive Vice-President and Chief Innovation and Inclusion Officer Angelito “Lito” M. Villanueva said at the same briefing.
Having an SRO license will let the group help regulators, he added.
“Even SEC Chairman Emilio B. Aquino has been saying that the SEC cannot really police everybody because given the fact that these companies are digital in nature, and most of them are not even registered with the SEC,” he said.
“One of those pain points that we have identified is the proliferation of digital lending companies, and of course, the overexposure and over-leveraged Filipinos having multiple loans from multiple online lending companies,” Mr. Villanueva added.
Credit Information Corp. (CIC) President and Chief Executive Officer Ben A. Baltazar said being an SRO would allow Fintech Alliance.PH to monitor and regulate these online lending firms.
“It’s very important for us to engage with these kinds of entities because a significant chunk of our covered entities are online lending platforms. In fact, they account for a huge surge in loans issued for the past couple of years. So, it’s very important for us to have this policy alignment,” he said.
“One of our internal checks is to see, other than being duly registered with the SEC, if they are affiliated with Fintech Alliance. It goes a long way. And if I might say that, your members that are lenders actually overall have better levels of compliance with the CIC,” he added.
Mr. Villanueva said that while the country has already surpassed the government’s target to have 269 fintech companies by 2028 since last year, not all these firms are members of the group. — AMCS