TO address the frequent reports of financial scams perpetrated by greedy opportunist schemers who routinely victimize gullible Filipinos who are easily swayed by promises of unrealistically big profits for their investment schemes, the proposal for the Securities and Exchange Commission (SEC) to establish and maintain its own online registry portal of all registered investment securities sounds a good idea.
The idea is the subject of House Bill 9216 by Albay Rep. Joey Salceda now filed in Congress. Titled “Scam Finder Act,” it mandates the SEC to install its online portal as a ‘first line of defense’ against investment scams in the country.
HB 9216 seeks to protect people against investment scams; assist them in navigating better the financial landscape and avoid its pitfalls; teach them how to save and spend resources judiciously; and guide them where to invest and how to manage it to avoid financial troubles.
Interestingly, cases of financial scams often hog the headlines and hundreds of people fall prey to investment frauds every so often despite variants of the scam having been widely publicized and public warnings issued against them.
Salceda attributes such frequent scams, like the Ponzi scheme, to lack of financial information and gullibility of ordinary people. Exploitative and greedy schemers prey on vulnerable sectors who lack diligence or are prone to rash judgment when offered unrealistically high returns for their investments.
Many Filipinos, he lamented, “rush headlong to entrust their hard-earned money to dubious investments which promise huge, often unrealistic returns in a short time, only to realize later their money had gone down the drain.”
HB 9216 mandates the SEC to put up and maintain an online Philippine Registry of SEC-Registered Securities, such as debt instruments including promissory notes, equities, collective investment schemes including mutual funds, and such derivatives that are registered with it and licensed to be sold to the public.
As lead agency, SEC will formulate and administer the portal management procedures to ensure the integrity of the database, its regular maintenance and real time updates. The Department of Information and Communications and the National Privacy Commission will provide it technical support.
While the system may not assure absolute protection for the investing public, it will surely serve as a first line of defense since prospective investors can easily verify whether a security or plan being transacted is registered with the SEC or not.