SEC pushes next wave of capital market reforms

MANILA, Philippines — The Securities and Exchange Commission is lining up its next phase of reforms after what it considers as a successful first year in office of SEC chairperson Francis Lim, who focused on cutting regulatory costs and streamlining processes.

“For me, personally, we’re happy that we’ve done things. There’s a lot of positive comments about what we’ve done. Of course, as usual there’s also some resistance. I think that’s part of the job,” Lim said in a media briefing yesterday.

Lim summed up his first year as SEC chairperson as “both exciting and stressful.”

“Stressful, because we really wanted to speed up the transformation of our market. But we’re glad. And just for the record, I’d like to acknowledge our commissioners, without whom we would not be able to do what we have to do,” he said.

The commission is now moving to the next phase of its reform agenda, with measures aimed at making it easier to start businesses, raise capital and improve liquidity in the Philippine market.

Lim said the SEC is now pursuing broader structural reforms, including the proposed One Business Start Date, separate regulatory frameworks for debt and equity offerings, and market-making rules for listed securities.

The proposed One Business Start Date will allow companies to begin commercial operations upon securing their SEC registration or other primary regulatory license while completing other government permits in parallel.

It seeks to shorten the period between company registration and the actual start of business operations.

So far, the SEC has already expanded its digital services and imposed internal processing timelines, including a “deemed approved” policy for applications that go beyond prescribed periods.

At present, the SEC is also working with the World Bank to overhaul the public offering framework by separating regulatory requirements for debt and equity securities.

The review seeks to make disclosure requirements more proportionate to the type and risks of securities being offered, making capital raising more accessible to companies.

Further, the commission is working with the Philippine Stock Exchange and the Philippine Dealing and Exchange Corp. on a market making framework for publicly listed securities to improve trading activity and liquidity.

The rules on margin trading is likewise being reviewed by the commission as another mechanism for improving market liquidity.

Lim said the SEC is also looking at possible refinements to the Personal Equity and Retirement Account framework to make the program more attractive to both employers and employees and encourage greater participation in the capital market.

He said a deeper capital market requires not only more issuers and more investment products, but Filipinos who understand how to save, invest and participate in the market responsibly.

The SEC has submitted a proposed Financial Literacy Bill that seeks to make financial literacy a core subject in secondary education.

“We have made progress in reducing regulatory friction, but there are still structural barriers that prevent businesses from starting faster and companies from tapping the capital market more efficiently,” Lim said.

“Our next task is to address these barriers and build a market that is easier to access, more liquid and more competitive,” he said.