The Securities and Exchange Commission (SEC) has given DragonFi Securities Inc. final approval to test a financial product that would give eligible Philippine-based investors access to selected US stocks and exchange-traded funds (ETFs).
The product will be tested under the SEC Strategic Sandbox, or StratBox, which allows financial products and business models to operate within defined parameters while regulators assess their viability and potential risks.
Under DragonFi’s proposed model, investors would gain exposure to pre-approved US equities and ETFs through over-the-counter depositary receipts (DRs), rather than directly purchasing the underlying securities in the US market.
The amount an investor may place in foreign equities will also take into account the investor’s participation in the Philippine capital market. The SEC said the mechanism is designed to maintain a link between domestic and overseas investing.
The arrangement could provide another route for Filipino investors seeking exposure to US-listed companies and ETFs while keeping the product within the oversight of Philippine regulators during the testing stage.
The SEC said the sandbox trial will examine the offering’s operational framework, investor protection safeguards, and regulatory implications.
“Through the testing, the Commission will evaluate the viability of the proposed offering, including its operational framework, investor protection measures, and potential regulatory implications, within a controlled environment,” the SEC said.
Results from the trial could also be used by the regulator in developing or revising rules governing similar financial products.
DragonFi will remain subject to testing parameters and regulatory oversight imposed by the SEC throughout the sandbox period.
The SEC did not specify in its Sept. 24 announcement when the testing period would begin or how long it would run.
