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THE
Securities and Exchange Commission has ruled that thrift
banks may dispose of the services of the Philippine
Dealing and Exchange Corp., or PDEX, when buying or
selling government or privately-issued securities for
their own account.
But they
may not do so as soon as they turn around and sell them
to the public, or in this case, their clients who are
mainly micro-and small- and medium-scale entrepreneurs.
The
decision is especially painful as this could force the
65-member Chamber of Thrift Banks to abandon a service
they would normally do as an added service to clients.
CTB
executive director Suzanne Felix said the SEC informed
them of the decision the previous Thursday, where they
reiterated that as qualified investors the thrift banks
may trade securities for their own account without going
through the PDEX.
The CTB
was also told they may organize themselves into a
self-regulatory body and have themselves accredited
before they may engage in the sale of securities to the
public.
But not
before then, the SEC made it clear.
“We’re
just back to square one,” CTB vice president Pascual M.
Garcia III said on Friday.
The
decision means they still cannot sell debt securities to
their clients unless they are members of an SRO, which
can be themselves or with the PDEX.
Garcia
said an SRO might be pursued once this is validated by a
majority of their members.
But for
the moment, the SEC decision forces them into a corner
from which they have been seeking relief from both the
SEC and the Bangko Sentral ng Pilipinas.
Garcia
said the excessive membership and trading charges
imposed upon PDEX members have ramped up costs, making
GS activities for thrift banks prohibitive.
So-called mapping costs, for instance, will cost them
P50,000 per violation, far more than BSP sanctions for
various infractions that cost them only P30,000 per day
per violation.
“And
with PDEX you not only get fined P50,000 for mapping
violations, you also get your membership revoked
outright as well,” Garcia said.
“The
rules are harsher than those imposed by the BSP,” Garcia
said.
He finds
the monthly $500 PDEX terminal fee particularly
expensive, even though the contraption is indispensable
in the execution of trades.
Thrift
banks in the provinces need the contraptions to link
them with PDEX in Manila, but the rules were set up such
that transactions must be completed in full within 60
seconds or the fines apply.
Garcia
said the rules are such that CTB members may be fined
P50,000 for a transaction which could also be as small
as P50,000 also.
Bangko
Sentral ng Pilipinas Governor Amando M. Tetangco Jr.
said he was one with the SEC in supporting “government
securities trading in an organized market.”
If the
thrift banks find the PDEX impositions very prohibitive,
then they may choose not to become accredited entities,
or they may organized themselves into an SRO separate
from PDEX.
“We
support our supervised entities in securities trading
only within an organized market,” Tetangco reiterated. |
