SEC cautions public against investing in XM, eToro
THE Securities and Exchange Commission (SEC) has warned the public against investing in XM and eToro, saying these online investment trading platforms are not authorized to sell or offer securities in the Philippines.
In an advisory posted on its website, the SEC said that XM operates as an exchange platform where investors could trade foreign exchange, cryptocurrency contract for difference (CFDs), stocks, metals, and other assets.
The entity’s services consist of over 1,000 trading instruments, 24/7 trading of Crypto CFDs, 1000:1 leverage, and bonuses up to $10,500.
XM also reportedly offers a feature that allows the public to copy any and all trades of a “popular trader.”
In a separate advisory, the SEC said that eToro offers a crypto exchange that supports trading in more than 30 cryptocurrencies. as well as an exchange for trading commodities, currencies, and indices. It is also an online brokerage platform with a limited selection of stocks and exchange-traded funds.
The entity aims to make “trading accessible to anyone, anywhere and reduce the dependency on traditional financial institutions.”
According to the SEC, both platforms launched promotional campaigns on social media to entice investors, including Filipinos, to engage in trading activities.
The two platforms allow Filipinos to create user accounts on their platform for the purpose of “investing and trading unregistered investment products,” the commission said.
The SEC warned that those who act as salesmen, brokers, dealers or agents, representatives, promoters, recruiters, influencers, endorsers, and enablers of XM and eToro could face a maximum fine of P5 million or 21-year imprisonment, or both, under the Securities Regulation Code.
“In view thereof, the public is hereby advised to exercise caution before investing in these kinds of unregistered online investment platforms and their representatives,” the SEC said.
“In dealing with these unregistered platforms, the commission reiterates its advisory entitled advisory against dealing with non-registered foreign entities, organizations, and corporations,” it added.
In an e-mailed statement, eToro said it is “regulated by financial regulatory authorities in multiple jurisdictions around the world.”
“We take our legal and regulatory obligations very seriously. eToro has no local presence in the Philippines, and we do not actively promote or market our services in the Philippines,” it added.
BusinessWorld also reached out to XM but did not to receive a response by the deadline. — Revin Mikhael D. Ochave
