3 groups mull independent fixed-income exchange

The Chamber of Thrift Banks (CTB), the Money Market Association of the Philippines (MART) and the Investment Houses Association of the Philippines (IHAP) will jointly form a firm to handle the public board trading of government securities.

The groups said they would establish an independent fixed income exchange managed by professionals and would be licensed as a self-regulating organization (SRO).

“The exchange will focus only on fixed income assets with a platform that is cost-effective and within the bounds of the regulatory framework,” said Pascual Garcia III, president of Philippine Savings Bank (PSBank) and chairman of the CTB open markets committee.

“There is no plan to disenfranchise other platforms,” he pointed out.

The CTB decided to join forces with MART and IHAP to address the need to explore alternative SRO platforms that will be acceptable to members, where lower cost could be derived. Members of the three trade organizations are fixed income asset players and majority have quasi-banking licenses.

The group will pool resources to bankroll the initial phase of the incorporation, the documentation and other legal aspects.

MART president Paul A. Favila said the group is ready to take up the challenge of becoming an SRO “if it is the avenue, which could resolve impasse on the use of the fixed income platform of the Philippine Dealing and Exchange Corp. (PDEx).”

PDEX is the existing fixed income exchange, with most of its members coming from the commercial banking sector.

The Securities and Exchange Commission (SEC) had earlier declared it would consider another SRO entity aside from PDEx provided it meets all the necessary criteria.