ONLINE brokerage DragonFi Securities Inc. has started testing a financial product that will allow eligible Philippine-based investors to gain access to selected US stocks and exchange-traded funds (ETFs).
The Securities and Exchange Commission (SEC) has granted final approval for DragonFi to commence testing its proposed financial products and services under the SEC StratBox, a regulatory sandbox designed to assess innovative financial products and business models in a controlled environment.
Under the proposed model, eligible investors in the Philippines will be able to access pre-approved US equities and ETFs through an over-the-counter depositary receipt structure.
The model will also consider an investor’s participation in the Philippine capital market in determining the amount of exposure that may be allowed in foreign equities.
The approach is intended to create a complementary relationship between domestic and international investing while allowing the SEC to assess the regulatory implications of a product that could broaden local investors’ access to foreign securities.
Through the StratBox testing, the SEC will evaluate the viability of DragonFi’s proposed offering, including its operational framework, investor protection mechanisms and potential regulatory implications.
The testing results could also help the SEC determine whether existing regulations need to be enhanced to accommodate similar financial innovations.
DragonFi’s participation will remain subject to testing parameters approved by the SEC and to regulatory oversight throughout the testing period.
The SEC did not indicate when the product would become available to the broader investing public. It encouraged the public to monitor its official channels for announcements concerning DragonFi Securities’ participation in the SEC StratBox.
