SCCP raising capital to P500 M

MANILA, Philippines - The Philippine Stock Exchange (PSE) will raise the capitalization of its securities depository arm to boost the company’s operations.

“The board of directors of the PSE and Securities Clearing Corp. of the Philippines (SCCP), in a joint meeting, approved the increase in the capital stock of SCCP from P125 million to P500 million,” the PSE said in its own disclosure.

Out of the P375-million increase, PSE will subscribe to an additional P156 million worth of shares.

“PSE will pay an additional P106 million, bringing SCCP’s total paid-up capital to P200 million to support the depository operation,” PSE said.

Last week, the Securities and Exchange Commission granted a provisional license to the SCCP to operate as a holder of securities.

To date, Philippine Depository and Trust Co. is the custodian and depository for securities of firms listed in the local bourse.

SCCP, for its part, is a private firm organized primarily as a clearance and settlement agency for depository eligible trades executed in the local stock exchange.

As a securities depository, the company can hold securities for all financial institutions in the local bourse prior to the certificates being transferred to the owner or to another party. It can also process the settlement of share transactions.

PSE president and CEO Hans B. Sicat earlier said SCCP will allow the stock market to be at par with other exchanges and promote efficiencies.

“Systemic risks can also be further minimized when the backroom processes for equities trading are consolidated within the PSE,” Sicat said.

Market players welcomed the planned operations of SCCP.

“Giving PSE the mandate for depository services will help facilitate the introduction of more products in the market including a multilateral framework for securities borrowing and lending in the country,” said Michael Ferrer, former president of the Fund Managers Association of the Philippines.

“I think it is about time that the equities depository is integrated within the stock exchange as is done in other markets,” said Philippine Chamber of Commerce and Industry president Miguel Varela.

Federation of Filipino Chinese Chambers of Commerce and Industry president Tan Ching said the development will lower trading costs and improve investor protection.