SEC’s Barin bucks brokers’ exemption from equity rule

Securities and Exchange Commission (SEC) chairman Fe Barin said yesterday she is not too keen on granting brokers permanent exemptive relief from the requirement limiting their shareholdings to only 20 percent of the exchange.

The Securities Regulation Code limits to 20 percent the ownership or control by any industry or business group of the voting rights in any exchange.

The Philippine Stock Exchange (PSE) was given a one-time reprieve by the SEC, or until July 20, 2007, to comply with the industry ownership limit. But PSE director Robert Coyiuto is pushing for the grant of permanent exemptive relief since the board is now controlled by non-broker directors.

Barin, however, said the SEC should abide by the law. She stressed though that this was only her personal view and that any decision on this matter would have to be decided upon by the commission en banc.

"If they don’t like the rules then they should call for the amendment of the law," Barin said.

The industry limitation requirement was brought about by the need to reduce brokers’ control in the bourse amid concerns the exchange is still an "old boys’ club."

Coyiuto, however, said that with the installation of the Market Regulatory Division and Market Integrity Board, the brokers are now heavily regulated to strengthen the protection of stock market investors.

He also explained that both positions of the chairman and the president of the exchange are held by non-brokers.

The PSE has been trying its best to comply with the securities rule either through a secondary sale of common shares held by brokers or an issuance of new common shares for another private placement; or an initial public offering; an issuance of voting, non-convertible, cumulative, redeemable and non-participating preferred shares; or an employees stock option plan.