SEC secures NTC endorsement for blocking of OctaFX
The National Telecommunications Commission (NTC) has ordered all internet service providers to immediately block the website of OctaFX for the protection of the investing public, as requested by the Securities and Exchange Commission (SEC).
In a memorandum dated February 29, the NTC endorsed the request of the SEC for the blocking of the websites and apps of OctaFX for violations of the Securities Regulation Code, Revised Corporation Code of the Philippines, and regulations enforced by the SEC.
In a letter dated February 27, the SEC requested for the blocking of the website of OctaFX “in order to prevent the further proliferation of its illegal activities in the country, and to protect the investing public from its detrimental effects on our economy.”
“The public’s continued access to these websites/apps poses a threat to the security of the funds of investing Filipinos,” the SEC noted in its request. “The sale or offer of unregistered securities to Filipinos constitutes a violation of [Sections] 8 and 12 (sale of unregistered securities) and [Section] 28 (operating as an unregistered broker) of the Securities Regulation Code.”
The request followed an advisory issued by the SEC against OctaFX, also known as Octa Trading, in September 2023.
On its website, OctaFX offered the trading of over 300 financial instruments from a wide range of asset classes such as foreign currency pairs, foreign shares, index funds, and commodity derivatives. It also allowed leverage trading for a maximum leverage ratio of 1:500.
The operators of OctaFX appeared to be registered brokers and dealers oversees, and the securities and investments being offered likewise appeared to be registered in various countries.
In the Philippines, however, the Securities Regulation Code requires the prior registration with the SEC of any securities for public offering within the Philippines. This involves the filing of an application for registration and providing detailed information about the securities, including the issue price, use of proceeds of the sale, and nature of the securities.
The Securities Regulation Code further requires that the corporation issuing such securities must secure from the SEC a license to sell or offer securities to the public. Agents of the issuers must likewise register with the SEC.
The operator of OctaFX was not registered as a corporation in the Philippines, and operated without the necessary license to sell or offer any form of securities, to engage in the business of buying or selling securities, to operate as a broker or dealer, or to create or operate an exchange in the country.
Accordingly, the SEC advised the public to exercise caution before investing through OctaFX. It also warned those who act as salesmen, brokers, dealers or agents, representatives, promoters, recruiters, influencers, endorsers and enables of OctaFX that they may be held criminally liable under the Securities Regulation Code and penalized with a maximum fine of P5 million and/or imprisonment of up to 21 years.
