SEC fines PSE for breach of officer-member relations rule

The Securities and Exchange Commission (SEC) has slapped the Philippine Stock Exchange (PSE) with fines of at least P1 million for appointing Val Antonio Suarez president of the bourse in violation of rules prohibiting relationship between PSE members and officers. The SEC said this violates the Securities Regulation Code (SRC), given that Suarez’s wife, Milagros Cecilia Dolendo Suarez, presently serves as president of JP Morgan Securities Philippines, Inc. But in a statement Wednesday, “The [PSE] maintains its position that the prohibition under section 33.2 (h) of the [SRC] extends to one’s own professional association with a broker, and not to family relationships." “The [PSE] strongly believes Atty. Suarez possesses the qualifications, skills, motivation and energy for handling the job of president and [CEO] of the exchange and is legally qualified to serve as such," it added. SEC spokesman Gerard Lukban pointed out Wednesday that the commission had already reviewed the arguments of the bourse. The PSE earlier backed its claims with legal opinions from law firms Suarez Sycip Salazar Hernandez & Gatmaitan and Angara Abello Concepcion Regala & Cruz. Lukban noted that the basic fine of P1 million must be paid within five days of receipt of the notice. The corporate regulator levied an additional P1,000 in daily fines on the PSE until it complies with the rule, Lukban added. “If there are any questions as to how the law is being implemented by the commission, our decision can be appealed in the Court of Appeals," said Lukban. “The law provides remedies that they can avail [themselves] of." In a statement Wednesday, the PSE said it will appeal the SEC ruling. The PSE has yet to spin off its broker regulation function into a separate and independent entity. Suarez was formally named PSE president and CEO last July, more than five months after former PSE head Francis Lim stepped down from the post. — JE/MRT/VS, GMANews.TV