MANILA, Philippines – The Securities and Exchange Commission (SEC) has suspended another company for 60 days for violating a moratorium on launching new online lending platforms, representing the agency’s latest move to protect investors from possible fraud.

In an order dated July 10, the corporate watchdog said Jia Financing Inc. had been operating a website that offers “various financing services,” including providing loans ranging from $50,000 to $200,000 per client.

As a result, Jia Financing was issued a show cause letter on May 16 to explain why it should not be held liable for operating its undisclosed website.

According to the SEC’s financing and lending companies department, Jia Financing violated Memorandum Circular No. 10, Series of 2021.

Under this circular, only online lending platforms registered as of Nov. 2, 2021, are allowed to continue operating after the SEC received numerous complaints about the supposed violations of companies in this sector.

However, Jia Financing argued in its response to the letter that it did not offer personal, general purpose, consumer-based, unsecured nor mobile app lending products.

It supposedly focused on invoice-based receivables financing for formally registered small and medium enterprises, Jia Financing said, adding that it wanted to expand access to capital in this sector since smaller businesses did not have enough opportunities for traditional bank lending.

The core lending operations were done “offline and manually by dedicated teams,” the SEC cited Jia Financing as saying.

The company likewise explained that its website merely outlined its financial services, and that there was no public interface for loan applications, approvals or servicing.

But the SEC pointed out that Jia Financing had launched its website despite the existing moratorium on online lending platforms.

“The company’s justification for operating the website does not exempt it from compliance with [MC 10], as the circular does not provide any exemptions,” the SEC said in its order, adding that Jia Financing failed to disclose in its submitted business plan that it would operate a website.

The company was thus suspended for 60 days and ordered to pay a penalty of P10,000. INQ