Lawyer Fe Eloisa Gloria was the last member of the five-person regulatory body of the Securities and Exchange Commission to have come from within the commission. She was first appointed SEC associate commissioner in 1991 and reappointed to another seven-year term in 1998.
As an SEC insider, Gloria knew well how to deal efficiently with the public. When she was promoted to commissionership, many among her peers in the SEC expected her to end up heading the commission as its chairperson. She did not make it to the chairmanship but nevertheless finished in 2005 her second seven-year term as associate commissioner.
Gloria’s membership in SEC’s five-person commission is cited here to emphasize a point: the SEC has always needed the expertise of commission insiders for it to become more effective as a securities industry regulator. Not that outsiders have been found wanting in experience, making them less effective, but it pays to see at least one in the commission proper who rose from the ranks.
It is best to illustrate my preference for SEC insiders’ promotion to the commission by relating a story surrounding a top official. As the story has been told, there was this presidential appointee who had wanted to learn the workings of the SEC. This person’s questions would sound weird because he/she wanted to know something about a company’s capital stock. How did this person qualify to become a securities industry regulator?
From this anecdote, the readers of The Manila Times may raise a crucial but valid question: How could the business sector ever trust the SEC’s five-person commission if its members do not know much about the Articles of Incorporation and By Laws, which make up the corporate charter that requires SEC approval?
Underpaid but efficient
During her first term and three years into her second term as associate commissioner, Gloria, like her fellow commission members, had to review intra-corporate cases that were elevated by litigants who lost their case at the SEC’s so-called lower court presided by hearing officers.
For her efforts as SEC associate commissioner, Gloria received from P25,000 to P30,000 a month, while the SEC chairman got a little bit more, which was P35,000 a month. This kind of compensation made the commission members overworked but underpaid.
When the SEC lost its quasi-judicial functions to regular courts, its officials were allowed by law to raise their pay and perks starting in June 2001. (Please see previous Due Diligencer piece.) This should make the present members of the five-person commission very lucky to have been blessed with huge salaries despite less work.
How did the government happen to reward the members of the SEC regulatory body with fat salaries when they already lost jurisdiction over corporate intramurals?
Bigger pay for less work
Was it the SEC’s fault? Definitely it was not. Who then were responsible for maintaining an overcrowded but highly paid five-person commission?
There was no one to blame but the senators and the members of the House of Representatives. It took them more than four years to deliberate on the laws that the SEC implements but failed to reduce the commission to a maximum of only three members because, perhaps, this was not their priority.
Besides, in reorganizing the SEC, Congress approved the retention of a five-person commission. Then it clipped the commission’s powers by transferring the jurisdiction of intra-corporate cases to regular courts.
Perhaps, the senators and the members of the House of Representatives were such in a hurry to end their session that they forgot all about the composition of the SEC’s five-member regulatory body.
The SEC could even function more efficiently even with only one commissioner but this will require amending the law. Yet, if only Congress would take another look at the SEC, the more responsible among them would find it imperative to legislate the reorganization of the commission.
For instance, let the executive director be responsible for the operations of various SEC departments. As practiced, the commissioners exercise direct supervision over each of the SEC’s operating departments to the detriment of the public.
There should be a rule against too much intervention by the commission members on the approval or disapproval of the incorporation of companies, be they stock corporations or partnerships. As has been the subject of silent complaints, commissioners’ unnecessary interference delays the registration of new businesses.
It is really time for Congress to step in to protect new businesses and the businessmen from the rigid impositions of government.