The Philippines SEC has announced plans to implement a new trading system for debt instruments utilizing distributed ledger technology (DLT) in April 2023. These measures aim to attract the attention of companies to trade digital tokens and strengthen SEC's supervision in the digital era.
New DLT-Based Trading System
The SEC’s deputy secretary-general, Jomkwan Kongsakul, noted the increasing interest in digital token investments. So far, the SEC has approved four digital token projects and has two under review, emphasizing 'green' tokens and investment-based projects. Five other organizations have joined discussions with the SEC regarding fundraising for the development of soft power tokens, particularly in the green token sector.
Digital Token Market Development
The SEC is working to integrate digital tokens into capital markets, allowing firms to trade them and tap into large investor bases. Currently, buying bonds in the primary market can take 7 to 14 days before becoming tradable. Some bonds remain expensive, illiquid, and difficult to access for investors. Implementing advanced technology will make processes faster and more accurate, eliminating common errors and delays.
Technological Innovations and Impact
The SEC’s plan includes digitizing the entire bond trading system in both primary and secondary markets, improving investor registration and payment returns. Firms can build their own DLT infrastructure meeting unified standards. In the future, trading through DLT will be organized through networked ledgers, offering two types of securities: originally digital products and traditional products converted into digital form for trading.
The SEC's plans to introduce a new trading system using DLT aim to enhance control over digital investments and simplify trading processes. These measures could significantly increase liquidity, reduce costs, and improve accessibility of financial instruments for investors.
