PSE unit gets securities depository license

The plan of the Philippine Stock Exchange to set up its own equities depository system has taken shape as wholly-owned clearing house Securities Clearing Corp. of the Philippines (SCCP) bagged a provisional license to operate as a securities depository.

The provisional depository license given by the Securities and Exchange Commission to SCCP opens up a new – and potentially significant – revenue stream for the PSE group. It, however, signals a break from the depository platform of the Philippine Central Depository Inc. (PCD), which is operated by the PDS Group.

“We welcome the provisional license handed by the SEC for SCCP to operate an equities depository as this will usher in the vertical integration of the key processes involved in securities trading.  This should help our market to become at par with other exchanges, particularly in the Asean. We also hope to promote more efficiencies in the stock market under this structure,” PSE president and CEO Hans Sicat said in a statement.

“That can be a really huge source of income for the PSE.  It’s bottom line positive because even if they lower their fees a little, they will be making money,” said Joseph Roxas, president of Eagle Equities Inc.

The PSE owns about a fifth of the PDS group.

The PSE believes that setting up its own depository platform will give it the flexibility to introduce new products and service “with urgency.”

Also, a wholly-controlled depository platform is seen giving the PSE’s Capital Markets Integrity Corp. (CMIC) easier access to information necessary in the investigation of stock price manipulation cases and other violations of the securities laws.