PSE okays special fund for investors

MANILA, Philippines - The Philippine Stock Exchange (PSE) has secured board approval to create a fund, dubbed the “prosecution fund”, to assist individual stock market investors in filing and prosecuting a criminal case against a trading participant.

“The recent experience with failed brokers has taught the PSE a hard lesson. We endeavor to ensure investor protection from all possible fronts,” PSE president and chief executive officer Francis Lim said.

An individual with a direct investment in any of the securities listed on the exchange may request in writing through the Market Regulation Division (MRD) financial assistance through the fund to file and prosecute a criminal case fulfilling the following requirements:

• The criminal case is against a trading participant, its directors, officers and/or agents;

• The investor will jointly or collectively prosecute the case together with at least four other similarly situated investors;

• The actual civil claim of the investor against the trading participant shall not be less than P200,000; and

• It is based on, related to, a violation of the Securities Regulation Code and its implementing rules and regulations.

The Market Integrity Board, upon a favorable recommendation from the MRD, will have the authority to decide whether to grant any financial assistance to an applicant provided that the maximum amount of the grant for each applicant shall not exceed P100,000.

The mechanics for the disbursement of the fund will be subject to the implementing guidelines of the exchange. All penalties collected by the PSE from trading participants will be automatically allocated for the prosecution fund.

“The fund is part of our corporate governance initiatives to help ensure that stock market investors are protected. Definitely, it is one of the building blocks to increase investor confidence in our stock market,” Lim concluded.