The Market Monitor Minding the Nation's Business
By Riza Lozada
The Securities and Exchange Commission (SEC) has penalized six brokers for failure to comply with the implementing rules and regulations (IRR) of the Securities Regulation Code.
The brokerage firms were Equitiworld Securities Inc., First Orient Securities Inc., IGC Securities Inc., Regina Capital Development Corp., SJ Roxas and Company Inc., and The First Resources Management and Securities Corp.
All six are trading participants in the Philippine Stock Exchange (PSE) whose presidents and compliance officers have been issued notices by the SEC’s Markets and Securities Regulation Department.
The citation letters issued said the brokers failed to submit new requirements prescribed under the IRR, which took effect last Nov. 15.
Their violations included non-submission of risk management and internal control procedures, business continuity and disaster recovery plan, comprehensive information technology plan, updated written supervision and control procedures, and copies of proposed contract of outsourced activities or services.
Penalties imposed on the erring brokers ranged from P30,000 to P60,000; they were coupled with a stern warning that heavier sanctions would be imposed on them if they continued to violate the regulatory requirements.
The SEC said these requirements are intended to improve market structures, enhance investor protection, and strengthen the anti-money laundering framework.
The securities regulator based the new measures on global best practices and standards as being done in leading capital markets.
The Philippine Stock Exchange Inc. (PSE) also reported that its net income for the first half of 2016 was P372.70 million, up by 1.6 percent from P366.84 million in the same period last year as income from other sources rose and expenses declined.
The operating revenues from January to June 2016 registered a 13.9-percent decrease to P560.81 million due to lower income from listings and trading.
Its listing-related income dipped by 14.3 percent as fund raising through equities were put on hold due to volatilities and uncertainties ahead of the May national elections. Average daily value turnover for the six-month period was at P7.51 billion from P10.04 billion a year ago.
This contributed to the 11.2-percent decline in trading-related income and 22.0-percent dip in service fees. Meantime, the company’s other income increased by 41.5 percent to P156.41 million due to higher gains in investment income.
”We have seen trading activity pick up together with listings following the May national elections.
This renewed interest in our market, together with the new products we hope to launch this year, should bode well in the improvement of our financial performance in the second half,” PSE President and CEO Hans Sicat said.
Costs were effectively managed as total expenses were lower by 8.3 percent to P271.66 million.
“We are hopeful that we can get more investor participation once products and services like the Dollar Denominated Securities, Real Estate Investment Trust, and Public Private Partnership Company Listings are introduced,” Sicat added.