THE BANGKO Sentral ng Pilipinas (BSP) and the Securities and Exchange Commission (SEC) are in talks on regulating online lending platforms, including a possible transfer of oversight to the central bank.
The discussions include how oversight of online lending platforms (OLPs) could be shared or shifted, as the BSP also supervises credit-granting companies under its mandate, BSP General Counsel Roberto L. Figueroa told reporters on the sidelines of an event on Tuesday.
“Both parties are talking to each other and see how we can move forward on this. Because you’ve heard the Commissioner himself saying, they have no problem giving these entities to us. I think as far as the BSP is concerned, we’re not against that move. It’s just that we want to be sure that we’re ready when we take over,” he said.
SEC Commissioner Rogelio V. Quevedo said in a speech on Tuesday that the regulator has submitted a position paper proposing to transfer oversight of OLPs to the BSP, citing challenges in addressing fraud in the sector.
“Financing and lending companies are one of the serious headaches of the SEC. So, we are trying to establish a secure, interoperable, and trustworthy credit ecosystem. I have always maintained that since this is heavy, it should properly belong to the BSP. But the law leaves it with a joint regulatory ecosystem of the SEC and the BSP,” he said.
Mr. Quevedo said the SEC submitted the position paper this year, although the BSP and legislators have indicated a preference for a joint regulatory approach.
“SEC’s expertise is financial regulation like insider trading. We supervise the PSE. Particularly, securities trading. Aside from this, we are regulating companies with P1-million capitalization. We have to dedicate about 80 people for this. But it is not enough. Because there are almost 6,000 [OLPs]. If we lift the moratorium, it will be 10,000.”
Mr. Figueroa said the BSP and the SEC still need to determine whether any transfer of oversight would require legislation or could be implemented through regulatory issuances.
“But we are okay with either route. The BSP is willing because we do recognize the importance of these lending and financing companies and their potential impact on the economy,” he said.
Separately, Mr. Quevedo said the SEC is considering stricter governance rules following complaints from foreign fund managers related to potential exposure to flood control projects.
“Under the regulatory power of the SEC, we are contemplating on a definition of corporations vested with public interest. Because now, the listed companies are being monitored so we will come up with a definition,” he said.
“We will require them to have independent directors of corporations vested with public interest. Because now, it’s just a requirement of independent directors. But now 20% of the board must be independent directors of listed companies. And that is probably one of the reasons why they are being delisted. So, we are proposing that corporations vested with public interest must also have independent directors. Maybe at least 10% because in listed companies, 20%. But there must be at least one independent director of corporations vested with public interest.” — Aaron Michael C. Sy
