THE Securities and Exchange Commission has not changed much since it began implementing in 2001 the Securities Regulation Code (SRC), which our legislators passed after four years of tinkering with it.
As the securities industry’s regulatory agency, the SEC continues to exercise jurisdiction over the Philippine Stock Exchange and more than 200 corporations that went public by getting some of their shares listed on the board of the country’s only stock exchange.
The SEC has not been as busy as it used to be, because the new law took away its jurisdiction over intra-corporate battles and transferred it to regular courts. This, along with the self-regulatory organization status the SEC granted to PSE, made the job very easy for the five members of the commission.
Expanded commission. Yes, the SEC remains the same agency that the late Ferdinand E. Marcos expanded in 1983 the composition of what was a three-man body, by adding two more members to make it more effective in going after corporate hooliganism. Remember the infamous P700 million or so caper of businessman Dewey Dee?
Incidentally, the SEC’s five-man commission during the Marcos regime was immediately tested when Ruby Industrial Corp., an importer of vehicle parts, and Stanford Microsystems Inc., a microchips maker, fell. Both have been liquidated.
Ruby, however, was the longest-ever corporate war. After it obtained from the SEC suspension of payments of its liabilities, the majority and minority stockholders engaged in a corporate battle that lasted more than 29 years, and put an end to Ruby’s corporate life.
Bigger pay for less work. The SEC today is much different from what it used to be. Without stockholders’ battles, which took most of the time of the commission, it has been reduced to keeper of corporate files and regulator of the stock market.
In addition, though, it continues to supervise and monitor the performance and ownership changes of companies that are not public or listed. As such, they are of no interest to the public at all.
The question is, if the SEC has been left with much less responsibilities since 2001 after the overhauling of the securities law, should it still maintain a commission with five members? How did Congress fail to reduce the number of commissioners to the original three before 1983?
After four years of studying the provisions of the proposed Securities Regulation Act, Congress came out with a five-member commission when a small one would do. Ask SEC insiders who would probably agree that all the commission needs is a commissioner and an executive director to assist him or her. Why continue wasting people’s money on presidential appointees who work less for bigger pay?
Ten-fold salary increase. Let’s look back to the days when the chairman received P35,000 a month and the four commissioners P25,000 each. With this small salary, they had to contend with reviewing corporate intramurals, which were elevated to them by losing parties at the Securities Investigation and Clearing Department.
Then compare to these the compensation of the post-Perfecto Yasay commission. SEC insiders had complained that the five members of the commission proposed and approved their salaries with the chairman to get P350,000 a month and each of the four commissioners P250,000 each.
These monthly gross pays translate to 10 times the previous pays and perks of the old commission. The latest information disclosed by SEC insiders is that their and the commission’s other pays and perks have been consolidated into their basic salaries. The consolidation, however, has been disapproved by the Commission on Audit.
Correcting the mistakes. Who is going to correct the mistake committed by the members of the House of Representatives and of the Senate from 1997 to 2001? Perhaps, someone in today’s Congress would review SRC and see what aside from the commission’s composition should be amended.
Meanwhile, here is one suggestion: Why not amend SRC that would free closed corporations—meaning those that are not listed on the exchange—from too much regulation.
Imagine making it mandatory for these entities to file reports that are also required of listed companies?
What could be worse than punishing noncomplying private corporations and making them pay penalties that cut into their capital? What have the public got to do with the general information sheet that they are required to submit every year?
It is up to any member of Congress to propose amendments to the present SRC. But first things first: An interested senator or district representative may want to review the composition of the SEC’s five-man administrative body to determine if the SEC really needs five members.
By the way, the present SEC has so many departments when it should focus more on what is public. And what should be made more public than the companies whose shares are traded on the stock exchange.