PSE hikes surety bond requirement

In a bid to further enhance protection to investors, the Philippine Stock Exchange on Friday announced that it will be raising the required minimum amount of the surety bond posted by brokers.

In a statement, the PSE said its board voted in favor of a recommendation by its broker-directors to increase the surety bond from P5 million to P10 million for brokers. Dealers must also increase the minimum amount of their surety bonds from P1 million to P2 million.

A similar measure has been endorsed by the PSE’s Market Integrity board. The increase in the minimum amount is now submitted to the Securities and Exchange Commission for approval.

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

The PSE said the increase will be applicable to all brokers and/or dealers who have deferred compliance with the P100 million minimum unimpaired capital requirement.
Under the Securities Regulation Code (SRC), broker dealers who opted to defer complying the P100 million unimpaired capital requirement must post a surety bond amounting to at least the minimum amount specified by the law.

Lim earlier told reporters that the PSE will be pursuing legal actions against HK Securities Inc., which was found to have incurred a short security position of P106 million, to hasten the recovery of their entitlements while proceedings of the takeover before the SEC are pending.

Late last month the PSE suspended HK Securities following the regulator’s audit findings which uncovered the short security position of the brokerage firm.

http://www.gmanews.tv/story/124754/PSE-hikes-surety-bond-requirement

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PSE hikes surety bond requirement