SEC committed to enhance investor protection

MANILA, Philippines - The Securities and Exchange Commission (SEC), the corporate regulator, said it is committed to enhance investor protection through the implementing rules and regulations of the Securities Regulation Code (SRC) even as it faces opposition from traders and brokers.

 “The amendments introduced in the 2015 SRC IRR are designed to address varying concerns. They are intended to enhance investor protection, address regulatory gaps, strengthen the market and regulatory structures, and adopt global best practices. I believe the final version faithfully implements the statutory requirements as mandated by SRC,” said SEC chairperson Teresita Herbosa.

This as the SEC welcomed a Mandaluyong Regional Trial Court’s decision to deny outright the petition filed by the Philippine Association of Brokers and Dealers Inc. (PASBDI) to stop the implementation of certain provisions in the 2015 IRR of the SRC.

PASBDI filed the petition to invalidate provisions of the 2015 SRC IRR including amendments introduced to increase transparency in the dealings of brokers and dealers; to comply with anti-money laundering laws; and to promote investor protection.

The group is particularly opposed to the requirement that brokers and dealers provide the SEC with a comprehensive information technology plan, business continuity, disaster recovery plan, risk management manual and internal control procedures as a pre-requisite for registration.

However, the SEC said these requirements ensure the competence of brokers and dealers to promote and protect the investments of their customers.

Furthermore, PASBDI also questioned in the petition the amendments requiring disclosure of beneficial owners of shares of stocks, a requirement necessary to further efforts against money laundering and to comply with Supreme Court directive requiring SEC to look into the beneficial ownership of corporations and ensure compliance with the limit on foreign ownership.

In denying the petition, however, the RTC of Mandaluyong said that in the present petition, the application is not even supported by affidavits clearly showing facts and circumstances relative to the great or irreparable damage that would allegedly result to the Petitioner’s financial status and business reputation as well as to the capital market of the Philippines in its entirety, if such application will not be granted by the court.

 “General allegations/averments in the petition of violation of constitutional rights and grave and irreparable damage or injury that may consequently result, without more, will certainly not suffice,” the court said.

The Court has directed SEC’s counsel, the Office of the Solicitor General (OSG), to submit its comment on the petition within 10 days from receipt. Petitioner PASBDI is given the same period of time within which to file a Reply, if warranted.