Under siege, PDEx submits to SC scrutinyBy Doris C. Dumlao
Philippine Daily Inquirer
Financial market infrastructure provider Philippine Dealing System Holdings Corp. has opened itself—particularly its fixed-income trading platform Philippine Dealing & Exchange Corp. (PDEx)—to full scrutiny by the highest court of the land as it vows to preserve order in the local bond market.
This was after PDEx’s operation was challenged at the Supreme Court by former government technocrats and lawmakers who accused financial regulators, PDS and the Bankers Association of the Philippines (BAP) of conspiring to create a “monopoly” in the bond market.
In a statement, the PDS group said the petition was an “opportunity” to put to rest once and for all the “old” issues raised by the petitioners and the interests they supported.
“PDS humbly believes that its business rests on well-founded legal and statutory bases, and submits itself to the sound discretion of the Supreme Court,” the group said.
PDS said the issues raised by petitioners Sen. Aquilino Pimentel Jr., former congressman Luis Villafuerte, former Budget Secretary Benjamin Diokno, and former national treasurers Norma Lasala and Caridad Valdehuesa had already been the subject of hearings conducted several times by the House of Representatives and the Senate. PDS said the same issues and grievances had been carried by the mass media as well.
“Over the years, the regulators who are part of this action (the Department of Finance, Bangko Sentral ng Pilipinas, Bureau of the Treasury, and the Securities and Exchange Commission) and PDS have stood by the current market setup,” the PDS said.
All these public institutions likewise have been named respondents in the case, along with PDEx, the BAP, PDS as well as its depository and settlement units.
“The PDS group was founded to, among others, implement government policy. Only with an organized and regulated fixed income market will price transparency, price discovery, effective benchmarking, and investor protection be possible. These features are key factors in promoting the growth of the fixed income market, a very critical part of the capital market, with a wide and inclusive investor base,” PDS said.
“As the legal issues are being settled in the highest court of the land, PDS group assures its market constituents and the public that it remains committed to preserve order in the markets, and that it will communicate in a timely manner should any matters affecting the market come to fore. In the meantime, all markets shall conduct their business as usual.”
The petition filed with the Supreme Court called for the the issuance of a temporary restraining order. The order will effectively prevent the respondents from carrying out actions and regulations restricting government securities trading activities and other over-the-counter (OTC) transactions. It also called for a halt to various orders, circulars and other issuances from public respondents and will prohibit the BAP from “compelling, persuading or exerting any undue influence upon its member banks tending to coerce, convince or induce them to use exclusively the PDEx trading system in government securities.”
The petition also sought to prohibit the PDS group from “exercising revenue imposition akin to sovereign functions, such as imposing a fee for the use of the PDEx trading platform, which is the nature of a tax without legislative enactment, the proceeds of which will go solely to the coffers of the said private respondents, under highly questionable authority emanating from the SEC.”