Philippine Stock Exchange seeks amendments to Securities Regulation Code

MANILA, Philippines - The Philippine Stock Exchange (PSE) is seeking amendments to the Securities Regulation Code, particularly on the broker-director rule and mandatory tender offer threshold.

In a press briefing, PSE president Francis Lim said the exchange will continue to push for more market-friendly reforms to encourage more people to invest in the equities market.

Under Sec. 30.1 of the SRC, brokers or dealers are prohibited from trading for their own account or the account of their customers’ listed securities wherein any stockholder, director or associated person and any relative within the fourth degree of consanguinity or affinity is, at the same time, a director, officer or holding any position of trust and responsibility of the listed company.

Former PSE chairman Vivian Yuchengco said the 35-percent threshold for tender offers has caused damage to the capital market as it has affected the volume of trades and the market’s efficiency.

“It has not stopped insider trading. It just killed the market,” Yuchengco said.

Under the law, any group or person who intends to acquire 35 percent of a publicly held company within a one-year period or a 15-percent stake in a single transaction should make a tender offer to purchase the shares of the remaining shareholders of the publicly listed company at the same price.

Yuchengco said these provisions are deemed too restrictive to enhance market volume in the stock market.

Meanwhile, the PSE is studying a proposal from Ayala Land Inc. to relocate the bourse’s headquarters to a new site within the Bonifacio Global City.   

The lot, measuring 5,700 square meters, will be developed into two phases and may take three years to construct, said PSE director Ismael Cruz.

The first phase involves the construction of the 15-story PSE headquarter, which will occupy just 2,000 square meters of space while the second phase entails the development of a high-rise office building.

“The advantage of this is that we will be able to start our building already even without Ayala Land. We hope to finalize everything in three months,” Cruz said.

Lim, however, pointed out that the plan is still under evaluation by the building committee.

“It’s very preliminary. We may need to seek shareholders’ consent,” Lim said.