The Market Monitor Minding the Nation's Business
The public should exercise caution in dealing with individuals who are not licensed to solicit funds for stock market investments, the Philippine Stock Exchange Inc. (PSE) warned in an advisory.
“We are alarmed by reports that have reached us on unscrupulous practices that are perpetuated to scam potential stock market investors. These practices not only cheat the victims of their money but also unduly stains the reputation of the stock market among retail investors,” said PSE president and CEO Hans Sicat.
The PSE said those looking at investing in the stock market should open their own account with PSE-accredited brokerage firms and to transact only with employees of their chosen brokerage firm.
The bourse added the public should be wary of investment solicitations that offer share prices at discounted prices. Some of these schemes may include offering supposed shares of employee stock option plans.
“While it is true that some employee stock-option plans may be offered at discounted prices, the PSE approves these provided their distribution is confined to employees of companies offering the plan as part of their benefits. Also, always ask for a receipt when making investments in the stock market and the receipt must be issued by the licensed broker,” Sicat added.
In addition, the public should never believe in solicitations for stock market investments that guarantee returns on investment, he said.
While the Philippine stock market has provided compelling returns in the past years due to the positive corporate and the country’s economic performance, the public must understand that share price movements cannot be guaranteed.
To attract victims of scams, perpetrators of such illegal activities can make it appear that opening an account with a broker is a complicated transaction and that the process can be made easier if the investment is made directly in the account of the perpetrators rather than opening an account directly with an accredited broker.
All information about PSE-accredited brokerage firms are posted on the website of the Exchange.
“Inquiries on how to invest may be coursed through the PSE through telephone number 819-4100 or via e-mail at pird@pse.com.ph Complaints on stock market investment scams may also be raised through the contact information mentioned,”Sicat said.