SEC vs. brokers: The battle over who can sit on the PSE board
The Securities and Exchange Commission (SEC) is seeking formal counter-proposal from stockbrokers as tensions escalate over the plan to impose term limits on directors at the Philippine Stock Exchange (PSE). SEC Chairman Francis Lim said that while he remains open to feedback from the Philippine Association of Securities Brokers and Dealers Inc. (PASBDI), the concept of term limits is “non-negotiable” component of the commission’s governance agenda. “As far as I am concerned, term limits are non-negotiable. But I’m still listening to their comments. If they have a valid comment, we’ll consider it,” Lim told reporters. The corporate regulator recently issued an exposure draft of the rules, initiating a 15-day window for stakeholders to submit formal comments before the policy is finalized. “We will listen to the market; that’s why we have an exposure draft,” Lim said. “We have a proposal, so what is their counter-proposal? We will discuss it intelligently and thoroughly.” Lim added that the final decision rests with the SEC’s five-member en banc committee, noting he holds only one vote in the process. The proposed limits have drawn sharp criticism from veteran market participants who argue the rules infringe on shareholder rights. Vivian Yuchengco, a 28-year veteran of the PSE board and PASBDI chairperson, said the broker community plans to contest the measure. While Yuchengco cited her personal friendship with Lim, she indicated that legal counsel would likely handle the formal dispute while she seeks medical treatment in Singapore. “I don’t want to be fighting with Francis. We’re friends,” she said. Yuchengco argued that because brokers are also shareholders of the PSE, they should retain the right to be elected as directors without arbitrary caps, comparing their status to controlling shareholders in large conglomerates. Lim, however, countered this view, stating that the SEC is not depriving shareholders of their suffrage. He noted that investors remain free to elect other brokers to fill seats vacated by those who have reached their term limits. The standoff also touches on the availability of qualified leadership within the local capital market. Yuchengco expressed concern that the pool of eligible candidates is shallow, particularly for independent directors. She cited the potential disqualification of PSE Chairman Jose T. Pardo under related rules. “Independent directors with integrity who know the markets are very hard to find,” Yuchengco said. “Why fix something that isn’t broken?” Despite the pushback, Ramon S. Monzon, PSE President and chief executive officer, indicated the bourse would ultimately follow the regulator\'s lead. As the primary supervisor of the exchange, the SEC maintains broad authority to implement governance reforms it deems necessary for market stability. Lim remained confident in the legal standing of the draft, asserting that the rules do not violate existing laws.
