The Philippines' securities regulator recently issued a warning against XM, the online trading platform for forex and crypto CFDs, for offering unauthorized securities in the country. According to an advisory dated April 4, the Philippines' Securities and Exchange Commission (SEC) mentioned that XM is “not authorized to sell or offer securities to the public in the Philippines.”

Unregistered Trading Practices

According to the regulator, XM has more than 1,000 trading instruments, 24/7 trading of crypto CFDs, leverage of up to 1000:1, and bonuses of up to $10,500 US dollars. An investigation by the SEC revealed that XM has been running promotional campaigns on various social media platforms to lure investors, including Filipinos, into trading activities on its platform.

"Based on the commission’s database, the operator of the platform XM is not registered as a corporation in the Philippines and operates without the necessary license and/or authority to sell or offer any form of securities as defined under section 3.1 of the securities regulation code (SRC), to engage in the business of buying or selling securities, or as a broker, or dealer," the SEC wrote. Finance Magnates contacted XM for comments and will update this article once we receive their feedback.

According to the Philippines’ regulations, securities being offered to the public must be registered with the SEC, issued by a registered corporation or licensed dealer, and the issuer must possess a secondary license to sell or offer securities. In light of these findings, the SEC has warned individuals acting as salesmen, brokers, dealers, promoters, or recruiters for XM within the Philippines of criminal liability.

Philippines SEC Warns XM's Promoters

"Those who act as salesmen, brokers, dealers or agents, representatives, promoters, recruiters, influencers, endorsers, and enablers of the XM platform in selling or convincing people to invest in this platform within the Philippines even through online means may be held criminally liable under Section 28 of the SRC and be penalized with a maximum fine of five million pesos (P 5,000,000.00) or imprisonment of 21 years or both," the regulator mentioned.

Similarly, the SEC recently issued a warning against eToro, the global investment platform. The regulator cautioned of consequences for eToro’s promoters operating in the country. Despite the trading platform ’s global presence, the Filipino authorities emphasized its lack of authorization within their jurisdiction, issuing a regulatory advisory note against the platform on March 14.