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DragonFi is the first Philippine broker-dealer cleared under the SEC sandbox to test access to global stocks and ETFs.
Overseas investment limits will be tied to local holdings, giving investors global diversification while encouraging participation in Philippine markets, according to the SEC.
The service will begin with a monitored test group and can expand only after further SEC review and approval.
The approval opens a regulated route to overseas markets but does not authorize an immediate full-scale launch, with the service initially limited to a closely monitored test group.
“This is a defining milestone for DragonFi and for Philippine investors. Filipinos should be able to participate in the world’s largest capital markets through a structure that is locally regulated, transparent and built with investor protection at its core,” DragonFi CEO Jon Carlo Lim said.
DragonFi is a venture between tycoons Tony Tan Caktiong and Edgar “Injap” Sia II.
How it works
Instead of buying foreign securities directly, clients will invest through over-the-counter depositary receipts, which create Philippine-registered counterparts for the underlying global assets.
The framework links the amount investors can place overseas to the value of their Philippine holdings, combining international diversification with incentives to keep capital in the domestic market.
Testing will begin after the SEC validates DragonFi’s amended testing plan and client-suitability rules, with any expansion requiring further regulatory review and consent.
Local holdings determine global limits
Investors with certified Philippine assets may place up to 50 percent of their value in approved foreign offerings.
Clients maintaining Personal Equity and Retirement Account holdings may invest overseas up to 100 percent of the equivalent value of their Philippine investments.
DragonFi said foreign securities and cash will be held through segregated institutional custody arrangements, while local client funds will remain protected by licensed domestic institutions.
Regulator’s view
Phased rollout under SEC supervision
"We are encouraged to see more market participants test new approaches to providing investors access to global securities through the SEC Strategic Sandbox,” said McJill Bryant T. Fernandez, SEC commissioner.
“As with other sandbox initiatives, we look forward to seeing how the results of this testing can help inform the continued enhancement of our regulatory frameworks,” he added.
“More importantly, while we facilitate access to a broader range of investment opportunities, particularly for our retail investors, we remain committed to ensuring that our local capital markets are equally, if not better, promoted,” Fernandez said.
—Edited by Miguel R. Camus
