PSE won't give up bid to operate futures exchange

The Philippine Stock Exchange (PSE) is not giving up on its bid to operate a separate futures exchange although it has yet to formally submit an application before the Securities and Exchange Commission, a top official said.

PSE vice president for business development Jose Fernando Alcantara said they would pursue their application to operate an independent futures exchange since this was a decision made by a majority of its 166 active member-brokers.

A splinter group within the PSE members had formed a separate team with top investment bankers and finance managers to bid for the futures license. The group, known as Philippine Mercantile Exchange Inc. (Philmerc,) was the lone applicant that beat the Aug. 31 deadline set by the SEC in submitting requirements before putting up the futures exchange.

The PSE, on the other hand, was only able to submit a letter of intent along with a request to extend the deadline by at least six months, but this plea was denied by the SEC.

It has been four months since the deadline but the SEC has yet to act on Philmerc's application. The SEC's brokers and exchanges department is reportedly not yet prepared to exercise its oversight function in the futures exchange and that they want full assurance that this kind of trading will not be a repeat of the defunct Manila International Futures Exchange.

"The paramount objective of the Exchange in bidding for the creation of an independent futures exchange is not commercial, but to ensure an efficient and competitive Philippine national market which may be described as partitioned according to types of trading, but at the same time, well-integrated for better transparency and cost-effective trading," Alcantara said.