SEC questions appointment of Suarez

MANILA, Philippines - The appointment of corporate lawyer Val Antonio B. Suarez as president and chief executive officer of the Philippine Stock Exchange (PSE) has come under fire from the Securities and Exchange Commission (SEC).

In its letter to the PSE, the SEC said Suarez is covered by the prohibition in the Securities Regulation Code on the appointment of bourse officials.

In particular, the SEC cited Sec. 33.2 (h) of the SRC, which states: “The president and other management of the exchange should consist only of persons who are not members and are not associated in any capacity, directly or indirectly with any broker or dealer or listed company of the exchange. Provided, that the exchange may only appoint, and a person may only serve, as an officer of the exchange if such person has not been a member or affiliated with any broker, dealer or member of the exchange for a period of at least two years prior to such appointment.”

Suarez’s wife, Milagros Cecillia Dollendo Suarez, is currently president and a stockholder of JP Morgan Securities Philippines Inc.

Suarez, however, pointed out that his wife holds only one share in JP Morgan.

PSE chairman Hans Sicat also stressed thatthe exchange did not err in appointing Suarez, noting that two of the country’s leading law firms even concured with its position.  

“The corporate governance as well as the search committees of the PSE strongly believe that Atty. Suarez possesses the qualifications, skills, motivation and energy for handling the CEO job of the PSE,” said Sicat, concurrent chairman of the corporate governance and search committees.

He also noted that there is a provision under the SRC that expressly prohibits relatives by affinity or consanguinity of a broker or dealer from being appointed as president or management of an exchange.

Sicat said while the exchange does not intend to appear “uncooperative with its regulator,” it has several options should the SEC insist on its position.

When asked whether the bourse is ready to take the issue to the courts, Sicat said: “We are not waiving our rights in that respect.”

SEC commissioner Juanita Cueto said it is now up to the PSE to comply with the law. “It goes without saying, Its their call. If they continue, then there are penalties. Do they want to continue, being in violation? Or do they want to be in compliance? Their call, not ours.”