In a move aimed at safeguarding the interest of the investing public, the Philippine Stock Exchange (PSE) has suspended the trading operations of stockbrokerage HK Securities Inc. over its failure to remedy its short security position and infuse the required $1.15-million fund last Friday.
In a statement, the PSE said the suspension order was pursuant to Rule 39.1 of the Securities Regulation Code to protect investors and prevent further commission of violations of the src.
An an audit conducted by the PSE’s Market Regulation Division showed that HK Securities had a short security position of around P106 million.
“We would like to report to the public that HK Securities has failed to deliver its commitments and has therefore been placed under suspension. Our MRD has notified the Securities and Exchange Commission about the suspension and is already in the process of filing a petition to take over HK Securities,” said PSE president and chief executive officer Francis Lim.
“As soon as we are authorized to take custody of HK Securities’s property and assets, we assure the public that we in the PSE will immediately work on settling HK.
Securities’ obligations to its clients,” Lim added. Lim said the exchange will also work closely with the Securities Investors Protection Fund Inc. (SIPF) to ensure an orderly distribution of the property and assets of HK Securities.
Under the SIPF rules, the maximum claim that a customer can make on the fund is P100, 000.
In earlier cases, the PSE had auctioned the properties of failed trading participants to enable the bourse to pay the claims of their customers.
“Once again, I would like to assure HK Securities clients and the public in general, that we would do our part to counter any act of our brokers that will prejudice the interest of our valued investors. We stand firm in our commitment to do our share to protect the integrity of our stock market,” Lim further said. — Zinnia dela Peña