MANILA, Philippines - The Securities and Exchange Commission (SEC) has thumbed down the Philippine Stock Exchange’s request to reconsider its decision to impose a P1 million fine on the bourse.
The PSE was given five days from July 4 to settle the penalty.
The penalty stemmed from the PSE Nominations and Elections Committee’s failure to follow its own rules in qualifying candidates for its board of directors in the annual election held last month.
An investigation conducted by the SEC showed that the PSE Nomelec failed to conduct diligent screening of eight candidates by declaring them qualified even though the company or brokerage firm they represented “had violated various provisions of the PSE Amended Market Regulation Rules as well as Section 40.2 of the Securities Regulation Code.”
The 2011 Nomelec rules require that broker and non-broker candidates must be certified compliant with the securities law and PSE and/or SEC rules by the concerned departments of both regulators.
In particular, the SEC said the PSE Nomelec ignored the violations committed by candidates representing San Miguel Corp.,The First Resources Management and Securities Corp., Vantage Securities, Summit Securities, RTG & Co Inc., Lucky Securities, IGC Securities and Asia Pacific Capital Equities and Securities Corp.
The PSE, however, noted that the candidates had submitted certificates from the SEC that the brokerage firm they represent had valid licenses and had been compliant with the PSE and SEC rules.
But the SEC stressed that while broker candidates have valid licenses, this does not mean they are already compliant with the SEC and/or PSE rules.
The SEC explained that “violations of PSE and SEC rules may have been committed after the issuance of the license and not all violations may result in the suspension or revocation of license.”
It added that its certifications indicate that these brokers are authorized to operate as PSE trading participants and had no outstanding liabilities but the certifications also noted that these brokers had certain violations.