Two-year transition eyed for broker-director term limits

The simmering war between the Securities and Exchange Commission (SEC) and the Philippine Stock Exchange over a controversial plan to limit the terms of the PSE’s broker-directors may have been averted, at least for now.

I heard the PSE is eyeing a two-year transition period for the proposed memorandum circular released by the regulator in March 2026.

The circular is not yet in effect but has already ruffled some feathers, especially among the incumbent PSE directors.

PSE’s dragon lady, the feisty Vivian Yuchengco, had previously said they would bring the matter to court if it pushes through. When I bumped into her at the DivinaLaw 20th anniversary, she said: “I am a broker-shareholder. There’s no such thing as a broker-director.”

What was the proposed memorandum circular?

Under the SEC’s proposed guidelines, a broker-director may be elected for a term of one year, subject to a maximum cumulative period of 10 years, whether consecutive or intermittent, in the same exchange.

After serving a cumulative term of five years, whether consecutive or intermittent, the broker-director will observe a two-year cooling-off period prior to being eligible for reelection as a broker-director, provided that any broker-director elected as such after the effectivity of the circular is not covered by the cooling-off period. (The STAR, March 5, 2026).

A service for a fraction of a year exceeding six months will count as one full year for computing the five-year term and 10-year maximum cumulative service.

Yuchengco, founder of First Resources Management and Securities Corp. and chair of the Philippine Association of Securities Brokers and Dealers Inc., has said that she plans to put up a legal fight if the SEC pushes through with its plan.

For her, SEC chairman Francis Lim should look for other things to reform instead of limiting the number of years of an independent director and the number of years for brokers.

Yuchengco served as a director of the PSE from 1993 to 1994, 1996, 1998 and 2000 to 2001, and served as chairperson in 2002. She was re-elected as director in 2004 up to the present.

Good governance

SEC insiders, however, said the proposed circular will push through because it is part of the regulator’s efforts to promote good governance.

Perhaps the best compromise is the planned two-year grace period before the circular is implemented.

As of this writing, however, the SEC has not yet made an official announcement on the matter.

Will the SEC intervene in the Lopez probe?

Speaking of the SEC and good governance, I also heard that the corporate regulator is not inclined to meddle in the Lopez war and would instead leave it to the courts to decide.

This was in connection with the injunction that Federico “Piki” Lopez secured from a local court preventing his removal from Lopez Inc. as president and CEO.

However, SEC’s Lim said that the SEC would look into the complaint which Piki filed before the commission seeking to audit ABS-CBN Corp.

What Piki wants is for the SEC to investigate ABS-CBN’s top management, led by the media company’s chairman Martin “Mark” Lopez, for “squandering tens of billions of pesos of the losing media company’s resources and for violating the Revised Corporation Code and the Securities Regulation Code.”

Also named as respondents in the complaint are ABS-CBN president Carlo Katigbak and its treasurer and group chief financial officer Ricardo Tan.

The complaint was filed on May 6, 2026, through attorney-in-fact and corporate finance professional Gonzalo Ocampo.

Piki, a member of ABS-CBN’s board of directors, alleged in the complaint that the questioned actions of management reveal a concerning pattern where a significant amount of corporate funds has been disbursed in recent years for unnecessary expenses.

The complaint also revealed ABS-CBN’s financial decline, as it piled up “at least P45.5 billion in net losses from 2020 to 2025.”

‘Exorbitant executive compensation’

Against this backdrop, Piki also asked the SEC to probe the P3.18 billion released by ABS-CBN as payment to its top company officials and “favored persons” from 2020 to 2025. The complaint estimated that compensation and advances to officers, managers and other individuals would reach P10.6 billion – or 23.38 percent of the accumulated losses – during the same period.

ABS-CBN: Don’t drag us

In response, ABS-CBN lamented in a statement that it continues to be dragged into the ongoing Lopez family feud.

“ABS-CBN and its people continue to be dragged into a fight they are not part of,” the company said.

Furthermore, its board of directors said ABS-CBN has consistently commended its team for all its efforts and sacrifices made to keep ABS-CBN afloat.

“Instead of publicly calling out certain employees, and as a director of the company, Piki should just engage the Board in constructive discussion. This public discussion is unfair to these employees and is uncalled for,” the ABS-CBN statement said.

Furthermore, ABS-CBN said its entire workforce continues to focus on returning the company to solid footing.

“All these public accusations are painful distractions that take time and resources away from what is truly important to us. We hope our stakeholders choose to support our mission of public service rather than add further obstacles to our recovery.”

Obviously, the ongoing war among the Lopez cousins has taken another ugly turn.

What happens next is still up in the air.

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