SEC directs PSE to fill up seat vacated by Lim

The Securities and Exchange Commission (SEC) has directed the Philippine Stock Exchange (PSE) to fill up the vacant independent director seat no later than 15 days from lawyer Francis Lim’s assumption of the PSE presidency.

This as the SEC rejected PSE’s request for exemptive relief from the requirement of having three independent directors when Lim takes over the PSE post. Lim is expected to assume office on Sept. 16.

The non-broker director will represent the interests of market issuers in the 15-man board of the local bourse. He will replace WG&A president Enrique Aboitiz who declined his appointment as outside director after some brokers questioned the process by which he was nominated.

At present, the PSE has only 14 directors, seven of which are brokers and the remaining seven are non-brokers, comprised of three independent directors including the president, and persons who represent the interests of issuers, investors and other market participants who are not associated with any broker or dealer or member of the exchange for a period of two years prior to his or her appointment.

The SEC likewise ruled that former PSE president Cayetano Paderanga remains qualified to sit as non-broker, non-independent director subject to the requirements of the PSE by-laws and Section 33.2 (g) of the Securities Regulation Code.

Jose P. Aquino, head of the SEC’s Markets Regulation Department, said that when Lim assumes the presidency and the board has elected a new independent director, the only remaining vacant seat on the board will be the sectoral director, which Paderanga may occupy.

Paderanga’s fate will be known by Sept. 22 when the PSE board holds its next regular meeting.

Paderanga resigned as PSE president last June 9 to go back to his teaching job at the University of the Philippines. His resignation came after he was cited for conflict of interest due to concurrent positions in a credit rating serves agency and a private firm affiliated with a listed company.

He is president and chief executive officer of PNOC Development and Management Corp. and another private sector job as CIBI Information Inc.

Under the SRC, the PSE president should not be a member nor be associated in any capacity directly or indirectly with any broker, dealer or member or listed company of the PSE.