Key PSE official fired

MANILA, Philippines - The Philippine Stock Exchange (PSE) has lost another key official and more are reportedly expected to follow suit.

In a notice issued yesterday, the PSE said Joseph San Pedro, head of the Market Regulation Division, has been separated from the exchange, becoming the latest casualty of a perceived management shakedown.

The MRD is a critical unit of the exchange that oversees the stock market and its trading participants to ensure compliance with securities rules and regulations.

Informed sources said San Pedro was asked to resign after he posted in the PSE’s website a list of erring trading participants (including those headed by broker-directors), their violations and corresponding penalties, reviving impressions the bourse is still suffering from its image as an “old boys’ club.”

“This did not sit well with the broker-directors. They were up in arms over the MRD’s decision to fine them as well. This would be a big blow to the PSE’s efforts in stamping out market irregularities,” said the source who requested not to be named.

Based on the findings, 83 percent or 55 of the total 66 active trading participants were found to have violated various trading rules and code of conduct for traders and salesmen, resulting in the imposition of fines ranging from P5,000 to P140,000. These included brokerage houses whose nominees are currently directors of the PSE.

The violations ranged from simple administrative errors, like failing to time-stamp order tickets and send monthly statement of accounts to customers, to serious ones such as submitting proxy forms for voting purposes with different signatures of clients.

Some trading participants also failed to abide by the new risk-based capital adequacy ratio set by the exchange following the expulsion of brokerage firm HK Securities last year due to trading irregularities, including short-selling of shares. Other violations uncovered include failure to recognize monthly unrealized gains but the head of the PSE has downplayed the departure of the key officials from the bourse, saying there was nothing unusual with the resignations.

Among the other key PSE officials who left the exchange were Conchita L. Manabat who served as chairwoman of the Market Integrity Board and Roy Joseph Rafols, the former chief operating officer. Manabat, known for being a staunch supporter of capital market reforms, cited other professional commitments as reason for her resignation.