PSE doubles amount of surety bonds for brokers and dealers

The Philippine Stock Exchange (PSE) Board of Directors has unanimously approved a recommendation by its broker-directors to require trading participants to double the minimum amount of the surety bond posted by brokers.

The bourse said that the approval is conditioned upon the faithful compliance with securities laws, rules and regulations. The PSE’s Market Integrity Board previously endorsed a similar measure.

The PSE said that its board has backed the brokers’ initiative to raise the surety bond required under the securities law from P5 million to P10 million for brokers and P1 million to P2 million for dealers.

This will be made applicable to all brokers and dealers who have deferred compliance with the P100-million minimum unimpaired capital requirement.

"We are pleased that the broker-directors have taken it upon themselves to make a proposal that will significantly ensure investor protection and boost stakeholders confidence in our stock market," said PSE president Francis Lim.

Under the existing rules, the amount of the surety bonds required to be filed by broker-dealers who have elected to defer compliance with the P100 million unimpaired paid up capital requirements is fixed at not les than P5 million for brokers and not less than P1 million for dealers.

Such bonds shall be conditioned upon the faithful compliance with the provisions of the Securities Regulation Code and rules and regulations adopted by the broker dealer or of any salesman or Associated Person while acting for him.

"We are confident that we will get the full support of the Securities and Exchange Commission for the approval of this measure because we in the PSE believe that it will safeguard investors’ rights," Lim said.

He noted that "changes like this measure can be painful to our brokers. It would require adjustment and more importantly, an open mind to welcome changes if they are necessary to boost liquidity and renew investors’ confidence in our local market."

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Business Financial Services

PSE doubles amount of surety bonds for brokers and dealers