SEC penalizes 6 brokers on SRC

/ 03:10 PM August 18, 2016

THE SECURITIES and Exchange Commission has penalized six local stock brokerage houses, citing failure to comply with requirements under the 2015 implementing rules and regulations of the Securities Regulation Code, some provisions of which are still being disputed in court.

In a press statement on Thursday, the SEC said it had started imposing sanctions on non-compliant brokers and so far sanctioned six, namely: Equitiworld Securities Inc., First Orient Securities Inc., IGC Securities Inc., Regina Capital Development Corp/, SJ Roxas & Co. Inc., and The First Resources Management and Securities Corp.


The penalties imposed range from P30,000 to P60,000. The SEC also issued “stern warning that heavier sanctions maybe imposed on them if they continue to violate the regulatory requirements.”

These SEC said notices had been issued by its markets and securities regulation department to the presidents of these Philippine Stock Exchange trading participants.


“I guess SEC has way of persecuting people who fight their no-due-process action. Anyway, God is fair. With (President) Duterte, changes are here and coming,” said Vivian Yuchengco, president of First Resources.

“We, majority, have the same stand with PASBDI,” said Trina Kalaw, chair of First Orient which was among the brokers penalized by the SEC.

A similar reply was issued by Luis Gerardo Limlingan, managing director of Regina Capital. “We are also aligning with PASBDI just to show solidarity in how we respond,” he said.

The SEC’s citation letters stated that the brokers failed to submit new requirements prescribed under 2015 SRC guidelines, such as risk management and internal control procedures, business continuity and disaster recovery plan, comprehensive information technology plan, updated written supervision and control procedures, and copies of proposed contract of outsourced activities or services.

To recall, the Philippine Association of Stock Brokers and Dealers Inc. (PASBDI) had disputed in court 42 provisions in the 280-page IRR. The case is now pending at the Regional Trial Court of Mandaluyong City.

PASBDI argued that certain provisions of the IRR were contrary to the Constitution as it denied them due process and even impaired the obligation of contracts. The group also argued that the amendments were contrary to law that they were supposed to implement and even amended the SRC. They also lamented that the SEC had neither explained the amendments nor showed that the existing rules were no longer workable.

For its part, the SEC said the new requirements were intended to improve market structures, enhance investor protection and strengthen the anti-money laundering framework. These are based on global best practices and standards as being done in leading markets.


The 2015 IRR took effect on November 09, 2015.

The SEC said sanction letters were now being prepared for market participants who were not compliant with the new rules.

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TAGS: 6 brokers, Equitiworld Securities Inc., First Orient Securities Inc., IGC Securities Inc., PSE, Regina Capital Development Corp/, SEC, SJ Roxas & Co. Inc., The First Resources & Management Corp.
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