PSE, BAP step up efforts to close capital market unification deal
The Bankers Association of the Philippines and the Philippine Stock Exchange have made a last-ditch attempt to unify the country’s capital market infrastructure by seeking intervention from Finance Secretary Cesar Purisima to help iron out the regulatory kink in time for today’s deadline to close the deal.
Sources said the deal was at risk of breaking up unless closure would be achieved today. The closure is tied to the Securities and Exchange Commission’s approval of the exemptive relief from the 20-percent limit on ownership by the PSE of the Philippine Dealing System (PDS) group, the holding firm for fixed-income trading platform Philippine Dealing and Exchange Corp. (PDEx), Philippine Depositary and Trust Corp. (PDTC) and Philippine Securities Settlement Corp.
In a joint letter dated Nov. 25 from the Bankers Association of the Philippines and Philippine Stock Exchange, Purisima was appraised of the SEC’s inaction and the absence of formal response to four letters sent in the last three months.
In the letter, the BAP and PSE reminded Purisima that the move to consolidate the PSE and the PDS was borne out of the vision by the Department of Finance itself and the Bangko Sentral ng Pilipinas. A unified exchange, they said, was also “aligned with global best practices and market structure to the end that capital markets should be transparent, efficient and with central clearing and settlement facilities across multiple asset classes, whether equities, fixed income, derivatives or other securities.”
With the deadline looming, a favorable action from the SEC was needed to “make this vision come true,” BAP president Lorenzo Tan and PSE president Hans Sicat said in the letter.
The two institutions noted that after a year of working hard on the deal, the PSE finally signed a share purchase agreement with the BAP and other shareholders, effectively raising the PSE’s stake in PDS to more than 67 percent but subject to closing conditions. Doris Dumlao-Abadilla
