NOT everyone was surprised by the move by the Securities and Exchange Commission on Tuesday to reject the proposed acquisition of bond market operator PDS Holdings by the Philippine Stock Exchange, but it is doubtful that anyone, whether they agree with the SEC’s decision or not, is very happy about it.
What the SEC declined was a request from the PSE for an exemption from a rule that stipulates an owner of an exchange cannot have more than a 20-percent stake. The rule permits the SEC to grant an exception in cases in which they judge that the public interest will be better served, or at least not harmed, by allowing an owner to have greater than a 20-percent ownership share. The PSE, of course, is seeking to merge the country’s equity and fixed-income exchanges by taking a controlling stake in PDS, and so applied for the exemption.
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