The Anti-Red Tape Authority (ARTA) has denied the request of LYKA Philippines Solutions Inc. (LYKA) for the automatic approval of its application for company registration with the Securities and Exchange Commission (SEC).

LYKA is a rewards-based social media platform that enables app users to share “gems” within its network. The gems can be exchanged for goods in the LYKA mall.

According to the SEC’s statement, Michael Bryant Lim, president of LYKA filed a request before ARTA saying that the commission hasn’t acted upon its prior request.

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However, ARTA was in agreement with the SEC in rejecting the application for automatic approval because “entities under investigation are not covered by the reglementary period provided in the Ease of Doing Business Act, and automatic approval is only applicable upon submission of complete requirements.”

Fintech

The SEC pointed out LYKA’s failure to submit proof as to how the company finances its operation, a list of merchants, a list of payables, and a document disclosing the owners of GRL17 Nominee Limited, which appeared as the founding member of Things I Like Company, Ltd., LYKA’s proposed major stockholder.

The commission emphasized the need for clearance from SEC Enforcement and Investor Protection Department (EIPD) as one of the requirements for fintech companies that want to register.

“However, [Lim] failed to show proof that it submitted a clearance from the [EIPD]. Accordingly, it cannot be said that there was the submission of complete documentary requirements as stated in the Citizen’s Charter of SEC for Registration of Corporations through eSPARC,” the ARTA said in its resolution denying the request. “Considering the foregoing, the requirements laid down under Section 10 of RA 9485, as amended, and its Implementing Rules and Regulations for Automatic Approval have not been met. Thus, Automatic Approval is not warranted in the instant application for registration of company submitted by LYKA with the SEC.”