THE Philippine Stock Exchange has requested the corporate regulator to review its decision to penalize the bourse for failing to obtain certifications for candidates during last month’s board elections.
In a letter dated May 31, the PSE Nominations and Elections Committee requested the Securities and Exchange Commission to reconsider the imposition of a P1-million fine upon the PSE/PSE Nomelec.
For its part, the corporate regulator deferred the discussion of the petition until next week’s en banc meeting pending the submission of additional inputs from the SEC’s Market Regulation Department and the PSE Nomelec.
“It appears the commission and the Nomelec have different interpretations of the rules,” Gerard Lukban, SEC commission secretary, told reporters.
Late last month, the corporate watchdog penalized the PSE and its Nomelec in violation of the Securities Regulation Code for “not complying with its own rules in the evaluation of candidates for the election of directors of the Exchange held on [May 14].”
The SEC directed the bourse to pay the fine within five days from receipt of the order.
In an investigation, the corporate regulator found that eight candidates violated various provisions of the PSE Amended Market Regulation Rules as well as the SRC, barring them from running for the election.
The candidates hailed from the following firms: San Miguel Corp., Venture Securities Inc., The First Resources Management & Securities Corp., Summit Securities Inc., RTG & Co. Inc., Lucky Securities Inc., IGC Securities Inc. and Asia Pacific Capital Equities and Securities Corp.
The SEC noted that the PSE-Nomelec ignored the violations committed in the preceding year as indicated in the certifications, contrary to the express provision of the Nomelec rules.
The 2011 Nomelec rules require brokers to comply with PSE and SEC rules for the preceding calendar year as certified by the concerned departments of the two organizations.
In its response to a show-cause order from the SEC, the PSE-Nomelec disputed the findings of the Market Regulation Division of the SEC, insisting it had all the required documents and certifications during its evaluation of candidates for the 2011 annual stockholders’ meeting.
The bourse said broker candidates had submitted certificates from the PSE-MRD that their respective brokerage firms have valid licenses and have been complaint with the PSE and SEC rules.
But the corporate watchdog pointed out that “the fact that a broker has a license and is operating is different from broker’s record of compliance with the PSE and SEC rules for 2010.”
