The Securities and Exchange Commission has approved the rules governing the election on May 24 of the 15-member Philippine Stock Exchange board.
Under the approved framework for the PSE’s nomination and election committee (Nomelec), broker representatives must not exceed seven while non-brokers are assured of at least seven seats.
The 15th seat is allotted for the PSE president.
Out of the maximum of seven seats that brokers can occupy in the 15-member board, at least one—but not more than two—should represent the small broker or broker B category.
Brokers whose combined volume/value of trade and paid-up capital is below P5.6 billion are classified under category B or small brokers. Those above this level are considered as broker A or big players.
In determining the proportional representation of brokers, the volume/value of trade will have a weight of 60 percent while paid-up capital will have a weight of 40 percent.
For the seven seats earmarked for non-broker directors, at least three should be independent directors while the rest can represent the interest of corporate issuers, investors and other market participants.
There must be at least one representation from each sector.
Meanwhile, the SEC also approved the nomination and election committee rules of Capital Markets Integrity Corp. (CMIC).
CMIC was created in 2012 as independent entity authorized by the SEC to operate as a self-regulatory organization.
It was created to oversee the behavior of market participants and be responsible for market surveillance.
It is a separate and independent company from the PSE, governed by independent directors.
The framework directs CMIC to have at least four independent directors and one PSE independent director in its board.
The charter was also amended to mandate a seven-member board.
The CMIC board used to have only five members.