PSE plans continued trades sans PhilPaSS clearing

MANILA, Philippines — The Philippine Stock Exchange (PSE) plans to amend existing rules to allow trading even when the Bangko Sentral ng Pilipinas is closed (BSP).

“The policy of the exchange is to continue to operate and remain open for trading even on days when the clearing activities of the BSP or Philippine Clearing House Corp. are suspended,” the PSE said in a draft circular.

At present, the settlement of trades at the PSE uses the Philippine Payment and Settlement Systems (PhilPaSS) of the BSP.

 As cash payments for stock purchases are coursed through PhilPaSS, the PSE relies on PhilPaSS being operational in order to allow settlements to be completed.

 “Following the T+3 days settlement cycle in the market, trades are settled on a rolling basis daily. If trading happens without the ability to settle trades from T+3 days, the entire settlement cycle is disrupted under the current rules and systems configuration,” the PSE said in explaining its proposal to amend the trading rules.

The PSE said it recognizes the global market dynamics in operating the country’s sole stock market.

As such, it is important for the exchange to have the ability to allow investors to trade in the market and minimize situations where trading is suspended unexpectedly.

“However, the exchange also recognizes that the declaration of non-working days for government offices is a prerogative vested on government alone, even if such decision affects the ability of the PSE to open the market for its investors,” it said.

Trading was suspended Monday after the BSP said there would be no clearing and settlement due to the suspension of work in government offices as a result of the transport strike.

PSE, however,  resumed trading Tuesday even as classes and government offices remained suspended as the nationwide transport strike extended for another day.