THE Philippine Stock Exchange Inc. (PSE) on Monday said brokers still own 26.44 percent of the exchange as of end February, a number that ballooned from last year and still above the mandatory 20-percent cap of ownership of a particular sector.
The PSE said a review of the data submitted by the brokers revealed 7.26 percent of the outstanding shares, including the 3.38 percent acquired under the PSE’s stock rights offering, were held by brokers’ principal shareholders and related parties in omnibus client accounts.
“As these were not included in broker’s proprietary accounts, these were not captured in the broker ownership report submitted by PSE’s Corporate Secretary,” it said in its disclosure.
“The Exchange is putting together a compliance plan to further bring down broker ownership to the level required by law. In the meantime, brokers are being prohibited from buying PSE shares for their proprietary account, the account of their related parties, and the principal account of other broker dealers, pursuant to the SEC Rules Governing Trading of PSE Shares.”
The PSE said it is in “earnest efforts to comply with the 20-percent industry limit provided by the Securities Regulations Code.”
In March last year, the PSE was able to bring down the brokers’ ownership to about 21.71 percent, shortly after listing its 11.5 million shares in stock rights offer to existing shareholders, a measure intended to pull down brokers’ ownership to the minimum requirement.
The PSE raised P2.98 billion from the measure, proceeds of which were supposed to be used for the acquisition of the Philippine Dealing System, among others. To date, the PSE still has not bought the PDS.
“The Exchange configured its trading system to automatically prevent the posting of a buy order for PSE shares from accounts that will push it over the 20-percent threshold, or if it is still below 20 percent, but the matching of the buy order will cause broker industry ownership to breach the 20-percent level,” PSE President Ramon Monzon said earlier.
Image credits: Alysa Salen