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Mount Peak loses license due to fraudulent reports
The Securities and Exchange Commission (SEC) has revoked the registration of Mount Peak Securities Inc. as a broker dealer following the discovery of "severe fraudulent financial reporting practices." In a decision, the SEC Markets and Securities Regulation Department (MSRD) canceled the registration of Mount Peak as a broker dealer for violating 12 provisions of the Securities Regulation Code. The SEC also revoked the license of Mount Peak President Wilster S. Gaweco as a salesman, and Marie Stephanie Gaweco as an associated person, while perpetually disqualifying both from being registered persons. For these consolidated violations, the SEC imposed penalties amounting to P17.25 million. The decision follows an investigation by the Capital Markets Integrity Corp., which found irregularities in Mount Peak's business practices, books, records and back-office system. The CMIC subsequently placed Mount Peak under involuntary suspension in August 2025, noting that the Company's continued operations would be detrimental to the interests of the Philippine Stock Exchange (PSE) and the investing public. Gaweco admitted that an account under the name of Michael Malate was a dummy account maintained for his own personal benefit. Mount Peak then executed trades under the guise of a client account and updated the dummy account's information to maintain an appearance of regulatory compliance. The SEC also noted discrepancies in the personal details in the customer account information form of a client for 2023 and 2024, with the signature affixed for 2024 confirmed to be forged. Mount Peak's creation of the dummy account, engaging in the unauthorized dispositions of client securities and execution of such transactions despite the client's insufficient positions constitute a violation on ethical standards which require broker dealers "to observe high standards of commercial honor and just and equitable principles of trade." The company was also found to have failed to act in the best interest of its clients and for the best integrity of the market due to numerous defects in its back-office system, which included the presence of unidentified User IDs, lack of independent supervision, and inconsistent system-generated reports. "In the instant case, notwithstanding its breach of the minimum prescribed RBCA ratio across various periods, (Mount Peak) did not cease doing business nor notify the PSE and the Commission of such breach... (W)orse, (the company) submitted incorrect RBCA Reports to make it appear that the Company is compliant with capital adequacy requirements," the decision read. RBCA stands for risk-based capital adequacy. The adjustment of the company's financial records by the CMIC also indicated that Mount Peak's unimpaired capital would have fallen below the minimum threshold of P30 million. In addition, the company failed to maintain the appropriate funds in its reserve bank account, and report it, even incurring zero balance for August 2024 and February 2025, indicating that it had no funds maintained for customers' money balances during those periods. "The myriad irregular practices in (Mount Peak), such as the use by the company president of a client account for personal gain, the deficient back-office system, and the maintenance of errant and inconsistent books and records, indicate an ineffective compliance function within the Company," the decision read. The MSRD decision is now pending before the Commission En Banc after Mount Peak filed an appeal. CMIC suspends Supercity Realty trading amid 3,700% price surge
Manila Standard | 08 January 2026 by Jenniffer B. Austria The Capital Markets Integrity Corp. (CMIC), the market regulation arm of the Philippine Stock Exchange, suspended trading of dormant listed firm Supercity Realty Development Corp. (SRDC) after it failed to provide clarification on a recent surge in its stock price. Over the past 10 trading days, SRDC's share price surged more than 3,700 percent, rising to P45.95 from P1.20. In a notice dated Jan. 8, CMIC said its surveillance department formally required SRDC on Jan. 7 to submit a written statement confirming or denying any undisclosed material information regarding the sustained upward trajectory of its share price. As of the posting of the notice, the company had not complied with the directive. CMIC cited provisions under Article XI of its rules, which allow the regulator to restrict, halt, or suspend trading in cases of unusual activity or potential irregularities. The rules grant CMIC, with the approval of the PSE president, the power to issue such orders when price or volume benchmarks are breached or when deemed necessary under the circumstances. "In view of the foregoing and pursuant to the CMIC Rules, the trading of SRDC shares shall be suspended effective 9 a.m. today, Jan. 8, 2026, pending the company's compliance with the relevant regulatory requirements," CMIC said. CMIC serves as the independent watchdog of the PSE. The exchange said it would inform trading participants and the investing public of further developments. SRDC was incorporated on June 9, 2000, to engage in construction and related services. In 2008, the company decided to wind down its construction business to refocus on real estate development. To date, however, the company has not started any real estate projects. PSE to roll out volume-weighted average price trading on March 1
Philippine Daily Inquirer | 19 February 2024
The Philippine Stock Exchange Inc. (PSE) is rolling out volume-weighted average price (VWAP) trading on March 1 this year, allowing such transactions to be executed during the market's run-off period for every session from 3:00 p.m. to 3:15 p.m. This is among a host of new products and reforms the PSE is implementing to bolster liquidity and make the country's capital market more competitive in the region. A powerful trend indicator, VWAP allows day traders to determine the average price of a stock since it considers both price and volume. "The ability to easily place VWAP-based orders expands the options available to investors, especially those who prefer to use this approach in trading," PSE president and CEO Ramon S. Monzon said in a statement. "We expect foreign and institutional investors who prefer to look through price volatilities during the trading day and focus on the average price instead to avail of this facility," he added. According to the PSE, VWAP trades may only be executed by authorized salesmen or traders of a trading participant with a minimum transaction amount of P500,000. Welcome development "The implementation of VWAP trading is a welcome development as this provides an avenue where trades can be done at a certain VWAP price, reducing the market price impact of large transactions," Rastine Mackie Mercado, research director at China Bank Securities, told the Inquirer. "Hopefully, this translates to better flows as VWAP trading forms part of the PSE's initiatives to improve trading liquidity and investor participation," he added. Mike Macainag, head of retail equities at Maybank Securities, also welcomed the move, saying "this would aid more sophisticated clients and should encourage more trading activity in the future." The PSE earlier studied VWAP trading facilities offered by stock exchanges in Malaysia and Thailand before coming up with its own rules. - Miguel R. Camus INQ SEC to align with Asian markets on short-selling
Business World | 05 September 2023 THE SECURITIES and Exchange Commission (SEC) is aligning the country's short-selling environment with other markets in Asia to boost the local equities market. "We are pushing to align the short selling environment with the major Asian markets, which has the potential to promote liquidity, stabilize the market, protect investors, and further unlock the value of shares of Philippine corporations," SEC Chairperson Emilio B. Aquino said in a statement on Monday. The commission said it had looked at the adoption or non-adoption of existing practices in other markets to advance short-selling in the Philippines. Short-selling "or betting on the decline of a stock's price to make a profit" is allowed in other Southeast Asian countries such as Singapore, Hong Kong, Malaysia, Thailand, and Indonesia. The SEC said it is looking at requiring the submission of a regular report on activities relating to short-selling and securities borrowing and lending (SBL), and their compliance with existing rules and policies to guide future policies. "We will balance our role as regulator and market innovator, imposing the necessary restrictions and safeguards while ensuring that they will not stifle investors and trading participants from fully taking advantage of this trading strategy," Mr. Aquino said. Short-selling happens when an investor sells a security that he or she does not own, the SEC explained. It is consummated by the delivery of a borrowed security, "with a commitment to return the borrowed security or its equivalent on a determined or determinable future date." In 2018, the SEC approved the guidelines of the Philippine Stock Exchange (PSE) on short-selling transactions. The rules mandate that only the PSE index and exchange-traded funds are eligible for short-selling. Companies should also maintain a ratio of short interest to outstanding shares of at least 10%. The SEC also approved the Capital Markets Integrity Corp. (CMIC) implementing guidelines on SBL and short-selling in 2019, which cover the recording of SBL and short-selling transactions on trading participants¿ books and records. The guidelines call for trading participants to ascertain transacting parties have entered into the necessary borrowing arrangements prior to entering a short sale transaction. Meanwhile, the SEC said in a separate statement that there is a need for digital transformation to improve the ease of doing business in the country. "Over the years, we have adopted - and we continue to explore more - innovations in the way we receive, process and approve applications for company registration and corporate filings, as well as in the way we offer our other services to the public," Mr. Aquino said during a seminar in Davao City on Aug. 30. The SEC said it is focused on digitalizing and streamlining its internal systems and direct interfaces with the transacting public and boosting digital external links with partner agencies and the private sector. "Our digital transformation has been calibrated and tempered to the requirements of the transacting public and stakeholders," Mr. Aquino said. "We need to adjust to our customers." https://www.bworldonline.com/corporate/2023/09/05/543549/sec-to-align-with-asian-markets-on-short-selling/ Resolutions of CMIC in Three Cases Affirmed by Sec En Banc
18 October 2019 The Securities and Exchange Commission (“SEC” or “Commission”) en banc issued its decisions on three memoranda on appeal separately filed by various trading participants against the resolutions of the Capital Markets Integrity Corporation (“CMIC”). In the first decision issued on 30 July 2019, the SEC en banc affirmed CMIC’s resolutions, declaring that a trader or salesman should use and maintain only one (1) personal dealing account, in accordance with Article 4(c) of the CMIC Rules, and that the opening of additional accounts, particularly, in-trust or ITF accounts in behalf of a trader’s minor children, constitutes a violation of the cited rule. The Commission en banc ruled that the trader involved in the case, as trustee, had both voting rights and investment returns power, and there was nothing that prevented the trader from liquidating the shares in the subject accounts. Thus, the SEC en banc concluded that the trader, by opening additional accounts that the latter would ultimately manage, had clearly circumvented the rule. In the second decision dated 26 September 2019, the SEC en banc upheld CMIC’s resolutions, which had found a trading participant to be in violation of the know-your-customer or KYC rules. In this case, the trading participant’s client managed to transact shares of considerable value, notwithstanding the declaration in the customer account information form (“CAIF”) that the client had nominal net and annual incomes. The SEC en banc, in affirming the penalty imposed by CMIC on the trading participant, asserted that neither the client nor the trading participant had taken steps to update the CAIF, which is a key component of KYC regulation. Finally, in another decision issued on 26 September 2019, the SEC en banc sustained CMIC’s findings that the salesman of one trading participant had violated the Ethical Standards Rule with regard to a private placement with clients of the firm. The Commission en banc, however, also imposed a penalty on the trading participant for failing to observe the necessary diligence in its supervision of the trader, and ordered the conduct of further investigation to determine whether there are other violations of the securities laws. The pertinent decisions of the SEC en banc are published on the Commission’s website. Broker to take over DW Capital
Business World | 12 October 2018 STOCK BROKERAGE firm Timson Securities, Inc. is taking over the operations of DW Capital, Inc., after the latter was suspected to be trading P2.6 billion worth of securities without authority. In a memorandum posted Thursday, the Philippine Stock Exchange, Inc. (PSE) announced that all customers of DW Capital who have yet to move their accounts to another trading participant will effectively be transferred to Timson Securities. The stock exchange had earlier advised DW Capital customers to transfer their accounts to another trading participant of their choice through a notified affidavit of claim filed with the PSE last May. “In this regard, please be informed that effective today, all account customers who did not avail of such opportunity will be transferred to Timson Securities, Inc., as the designated successor trading participant of DWCI,” the PSE said. The PSE took over DW Capital’s operations in December last year, following a resolution issued by the Securities and Exchange Commission (SEC) which cited Rule 33.1(d) of the 2015 Securities Regulations Code. The rule pertained to the protection of customer accounts in case of business failure of an exchange trading participant. The takeover allowed the PSE to take the necessary actions to protect DW Capital’s customers, including the preservation of the assets, books, and records of the embattled brokerage firm. The stock exchange was also given the power to validate its customer accounts and settle its liabilities to customers. At the same time, the brokerage was prohibited from accessing the PSE’s trading system or facilities. The SEC started its investigation on DW Capital last August 2017, acting on a complaint filed by PSE’s independent watchdog Capital Markets Integrity Corp. DW Capital was alleged to have engaged in the unauthorized trading of securities for five accounts totaling P2,599,324,718. The accounts were owned by the Gaisano family, a member of whom is married to former DW Capital President Derwin Ngo Wong. — Arra B. Francia https://www.bworldonline.com/timson-securities-to-take-over-dw-capital/ Biz Buzz: Stockbroker pyramid scam
Philippine Daily Inquirer | 20 Nov 2017 If there is any more doubt as to whether friendship and money should mix, here’s more proof that they don’t? The head honcho of Philippine Commercial Capital Inc.’s stockbrokerage unit has found himself—along with a few other relatives—the subject of a syndicated estafa complaint courtesy of family friends who were enticed to invest millions of pesos through PCCI Securities. More importantly, the wealthy Blardony couple, Mauro and Cynthia, claim in their complaint before the Makati City prosecutor’s office that their funds were later lodged by PCCI Securities in an unrelated forex investment without their consent. Ultimately, their investments along with those of their children —amounting to almost P20 million, plus another $210,000—remain in the possession of either PCCI Securities or a company called Chartered Forex. Despite several demands for these funds to be returned over the last few months, they haven’t received a single centavo or cent of their money back. How did this begin? According to the complaint, Cynthia Blardony (a wealthy senior aide of the late Sen. Miriam DefensorSantiago) was the childhood friend of Corazon Galang, who is the sister of the PCCI Securities boss. The couple were long time clients of PCCI Securities and they transacted directly through Federico and Corazon, the latter being a senior vice president of the brokerage firm. “Cynthia and Corazon were friends since they were childhood and classmates,” the complaint said, adding that “we were the victims of what can only be considered as a pyramid or Ponzi scheme perpetrated by the respondents”. “They induced us to repeatedly ‘invest’ money to a company by promising high, guaranteed profits, but the supposed ‘profits’ came from money they obtained from other persons,” the Blardony couple said. What’s worse is that the Blardony couple alleged that the Galang siblings also enticed two Blardony children, Cesar and Isabel, to invest an additional $184,000 together, which was, strangely, deposited through the bank accounts of Corazon’s five children (who are also included in the estafa complaint sheet). These investments were made last year. And like any other investment that is too good to be true, the Blardonys received “partial returns” on their investments for the few months. Eventually, however, PCCI Securities “failed and refused to issue any statements of account” to the couple. Andit was all downhill from there. “Worse, PCCI Securities failed and refused to provide and return on our investment,” the Blardonys claimed. Being childhood friends, Cynthia Blardony asked Corazon Galang what the problem was regarding the sudden lack of investment returns, and the latter supposedly replied that it was difficult to release anymoney because of the “Bangladesh issue” (referring to last year’s money laundering scandal). “Nevertheless, Corazon assured Cynthia that everything would be okay by Feb. 15, 2017,” they said. In the meantime, the Blardonys dug themselves into a deeper hole when Corazon borrowedmoney from her childhood friend, Cynthia, who lent her $30,000 and one million shares of Nickel Asia Corp. worth around P5 apiece at that time. Can you guess what happened next? Yup. “Corazon was not able to return all of these to Cynthia,” the complaint said. Later the Blardonys suddenly received four promissory notes for their money issued by Jose Antonio Pery of Chartered Forex Inc. Who? What? Howdid that get into the picture? The couple said they gave no consent for their funds to be invested with a third party forex firm, as all their investments with PCCI Securities were limited to stocks or money market placements. “We later learned that Corazon solicits money from other individuals and entities in order to pay off investment returns,” the complaint said. “Before paying off investment returns, however, she first remits money to her brother, Federico”. With no progress being made in their efforts to recovering their funds, the Blardonys brought their complaint before the Capital Markets Integrity Corp. of the Philippine Stock Exchange, of which PCCI Securities is a member. Last September, the CMIC resolved the administrative complaint and found PCCI Securities and the Galang siblings “guilty of the unauthorized use or disposition” of the funds in question. They apparently didn’t contest the CMIC’s findings but paid a fine of P305,000. Unfortunately, the Blardonys want not just a fine on PCCI Securities. They want their millions back, so they filed the estafa complaint before the courts. As for PCCI Securities, is it still a surprise why their supposed acquisition by new investors (the trio behind 8990 Holdings) fell through? Now we know. SEC opens probe on DW Capital trade deals
Philippine Daily Inquirer / 05 Sep 2017 The Securities and Exchange Commission (SEC) has formally started investigating a claim that stock brokerage house DW Capital Inc. sold as much as P2.6 billion of its clients’ shares without their knowledge. The SEC said in a statement late Monday that a special hearing panel was established last Aug. 31, 2017 — almost a month since the issue first caught the public’s attention via the suspension of DW Capital. The panel was formed to look into the complaint of Valerie Gasiano-Sebastian, daughter of shopping mall magnate Edmund “Eddie” Gaisano Sr, both of whom were tagged as victims in the alleged scheme. The SEC said her complaint was received on Aug. 30. DW Capital was already suspended on Aug. 10, 2017 by the Capital Markets Integrity Corp., an independent regulatory body of the Philippine Stock Exchange. Gasiano-Sebastian claimed DW Capital had committed “unauthorized, fraudulent and deceitful acts… by allegedly selling complainant’s shares of stocks without her knowledge and consent.” According to the SEC, DW Capital have submitted documents sought by the SEC’s Markets and Securities Regulation Department last Aug. 18. The SEC noted in its statement Monday that DW Capital “asserted that the Gaisano family’s trades were all authorized.” The Gaisanos, based in Cebu, were allegedly victims of trades orchestrated by Mr. Gaisano’s son-in-law Derwin Wong, described as the former president of DW Capital. It was not immediately clear if there were other victims or perpetrators. Wong is married to another one of Gaisano’s daughters, Eda. The SEC said in its statement that Eda and Derwin Wong have been married since 2007 “although the couple has been living apart since late July 2017.” Eda Gaisano-Wong is also a client of DW Capital, the SEC said. There were no details on the whereabouts of Wong. Company officials and Gaisano family members could not be immediately reached for comment. The CMIC, as the PSE’s own broker watchdog, earlier filed a petition with the SEC to take over DW Capital. It also launched an audit into the company’s operations. “The petition for takeover is still pending with the SEC and the determination of financial deterioration of [DW Capital] is still ongoing,” the SEC said in its statement on Monday. While suspended, DW Capital cannot directly or indirectly trade on the PSE. According to the SEC, the special hearing panel was needed given the extent of the transactions involved and allegations of fraud committed by trading participant. “There are also claims and counterclaims by [DW Capital] and its clients the Gaisanos,” the SEC said. It added that the special panel was comprised of lawyers from the SEC’s Enforcement & Investor Protection Department, Office of the General Counsel, and Markets & Securities Regulation Department.” CBB Biz Buzz: In the dead of night
Philippine Daily Inquirer / 05:18 AM September 04, 2017 One would think that corporate regulators would act with dispatch when faced with a case where a stockbroker is suspected of committing fraud and accused of losing billions in pesos worth of clients’ money. But that doesn’t seem to the be case with the Securities and Exchange Commission, which, Biz Buzz has heard, has yet to act on the request of a stock market watchdog for the takeover of the controversial DW Capital Inc. Recall, of course, that key officials of DW Capital have been accused of having traded the stocks of Cebuano businessman Eddie Gaisano without the authorization of the mall tycoon (which, incidentally, is the father-in-law of DW Capital’s boss, Derwin Wong). The total damage, according to bourse sources, was P2.6 billion worth of stocks that have now vanished. Ouch. In any case, Capital Markets Integrity Corp.—the independent watchdog of the Philippine Stock Exchange—has filed a petition with the SEC asking that it be empowered to take over DW Capital. The goal is to preserve the records of the stockbrokerage a well as its assets, in case things need to be liquidated to compensate aggrieved clients. But almost a month after the petition was filed, the SEC has yet to grant CMIC’s request. Why? Who knows why? Meanwhile, word among our sources at the Ayala Tower One building is that that two steel filing cabinets were taken out of DW Capital’s office on the 16th floor of the building two Friday evenings ago. The Biz Buzz source, who was able to view the CCTV security tapes, said an additional 34 boxes worth of records were also “spirited out” on the following Saturday, in the dead of night. Without any order from the SEC, no one could stop the offices from being emptied out, of course. Well, maybe the SEC should just forget about that CMIC takeover request. “Good luck with finding anything now,” said one bourse official. Perhaps the victims should be asking the corporate regulator what’s causing the delay? SEC probes DW Capital's P2.6B "unauthorized" trades
Philippine Daily Inquirer / 11:46 AM August 25, 2017 The Securities and Exchange Commission is reviewing a petition from the Capital Markets Integrity Corp. (CMIC) to take over the operations of stock brokerage DW Capital Inc., whose operations had been suspended due to unauthorized trading of stocks worth around P2.6 billion. CMIC, a self-regulatory organization and the primary regulator of the trading participants of the Philippine Stock Exchange (PSE), filed with the SEC on Aug. 8 a petition to be authorized to take over DW Capital. Based on a briefer from the SEC, the petition for takeover alleged that DW Capital had engaged in unauthorized trading of stocks involving five accounts with market value of “short” or sell positions amounting to around P2.6 billion as of July 28, 2017. On August 7, the lawyers of DW Capital’s clients requested CMIC to prohibit the stock brokerage from trading the shares of stock of their clients, and to direct DW Capital to preserve the records of transactions pertaining to subject securities. However, it was reported to CMIC on August 09 that there were shares of stocks that had not been delivered by DW Capital to them. Thus, these clients demanded the immediate delivery of these securities. By August 10, the PSE issued a memorandum implementing a preventive suspension on DW Capital, without discussing the reason behind the suspension. For its part, the CMIC also issued an order preventing DW Capital – which is led by its nominee Derwin Wong and associated person Connie Lozada – from directly or indirectly trading on PSE. The CMIC also pursued a special audit of the stock brokerage. The SEC said that under the Securities Regulation Code, it may order an exchange to take over the operation of a failed trading participant, after proper investigation or verification, for the purpose of preserving and protecting the books, records, customer accounts, trade-related assets and settling its liabilities to its customers. On August 18, the SEC said it had instructed its markets and securities regulation department (MSRD) to conduct an investigation and verification of the allegations contained in the CMIC’s petition. The MRSD afterwards ordered DW Capital to submit various records that would establish the financial condition of the brokerage firm, including customer master list; stock position report detailed per customer, per stock, per location alongside portfolio reports, transaction reports; account ledgers; statement of accounts; confirmation invoices; customer account information forms. DW Capital, for its part, moved to partially quash the subpoena and requested for additional time to comply with the submission of documents. As of Thursday, the MSRD was still awaiting DW Capital’s submission of all the documents and records enumerated in the subpoena. MSRD has set hte case for clarificatory hearing this August 29 (Tuesday). Biz Buzz: Rogue stockbroker strikes
Philippine Daily Inquirer / 05:18 AM August 18, 2017 P2.2 billion. That's the value of a high net worth client's investments in the stock market that’s gone missing from the inventory of a local stockbroker named DW Capital Inc., according to our sources at the bourse. The stink is such that the Capital Markets Integrity Corp.—the independent watchdog of the Philippine Stock Exchange—recently ordered the suspension of DW Capital from trading directly or indirectly on the PSE. Yes, it's that bad. Biz Buzz was informed of the details by a couple of market officials familiar with the problem and, if the reports are accurate, this seems to echo previous stockbroker scandals of years gone by. Simply put, a ranking official of DW is being accused by his client of trading the latter's stocks (selling them, to be exact) without proper authority… and running off with the money. According to at least two sources, the problem started not too long ago when one of DW’s clients called up the firm's boss to order that his portfolio of shares in Metropolitan Bank and Trust Co. be sold. We’re guessing this is on account of the recent insider fraud incident at Metrobank the Inquirer revealed a few weeks ago that resulted in a sharp drop in the bank's shares (but that’s another story worth telling one of these days). In any case, this high net worth client—the owner of a large chain of shopping malls in Visayas and Mindanao—was shocked to learn that his holdings of Metrobank stocks (worth P2.2 billon at acquisition) were nowhere to be found. Word on the street is that the client’s portfolio was liquidated by the ranking DW official without his knowledge and the proceeds were kept by the official in question. That’s not the worst of it. We’re told that this stockbroker is actually married to the daughter of the billionaire client who is now worth a couple of billion pesos less (not that it would impact the latter’s net worth too much though). As is to be expected, this DW official is now the subject of an intensive search by concerned authorities, but has yet to surface, we're told. Well, you’d hide, too, if there’s P2.2 billion in a client’s funds that you somehow made to disappear, right? Biz Buzz heard the CMIC had approached the Securities and Exchange Commission seeking an order to take over DW Capital and, presumably, liquidate its assets to settle its liabilities with its clients, many of whom are prominent personalities in the Chinese-Filipino community. Now, we could only hope that there are still enough assets left. Brokers have enough buffer vs shocks -- SEC
MARKET regulators found all broker dealers at the Philippine Stock Exchange, Inc. (PSE) financially resilient despite sharp losses in late August, the Securities and Exchange Commission (SEC) said in a statement.
Citing a report of the Capital Markets Integrity Corp. (CMIC), the corporate regulator said all 132 brokers of the exchange met its risk-based capital adequacy (RBCA) requirements at the close of trades on Aug. 24 when the Philippine Stock Exchange index (PSEi) plunged by 6.7% -- its biggest one-day fall since June 13, 2013. The findings were released nearly a month after the SEC ordered trading participants to submit reports on compliance with capital requirements in the wake of a series of trading glitches at the PSE. Trading at the PSE has been halted three times in August, with an Aug. 25 outage being the biggest to hit the exchange in its entire history. The incidents fueled speculations that the bourse stepped in to cool the market after the 6.7% decline on Aug. 24. CMIC is the independent regulatory unit of the PSE tasked to oversee trading practices in the bourse. The RCBA requirements refer to the minimum liquid reserves to "protect the firms, their investors, customers and the economy as a whole." They ensure that the broker dealers have enough capital despite operating losses "while maintaining a safe and efficient market." According to the report, 98 out of the 132 brokers booked lower net liquid capital (NLC) -- the equity eligible for net liquid capital of a broker dealer when adjusted for non-allowable current and non-current asset. The report said 67 trading participants suffered a deterioration in their RBCA ratio -- the ratio of NLC to the total risk capital requirement (TRCR). TRCR is the sum of the capital requirements for each of the various risk exposures of broker dealers, such as operational risk, credit risk and position risk. Likewise, 22 brokers reduced their paid-up capital due to paper losses in their proprietary investments, while 88 trading participants saw an expansion in their aggregate indebtedness (AI) relative to net liquid capital. "These findings notwithstanding, none of the TPs breached any of these various RBCA thresholds as of Aug. 24, 2015," the SEC said. The brokers are required to comply with the following RBCA requirements such as: minimum RBCA ratio of 110%; minimum NLC of P5 million or 5% of AI, whichever is higher; maximum AI to NLC ratio of 2000%; and minimum unimpaired paid-up capital of either P100 million for those who registered after the effectivity of the Securities Regulation Code, and P30 million for those already existing before the effectivity of said law. Under the corporate regulator's rules, broker dealers should compute their RBCA ratio and financial requirements every day, as well as submit a report on their compliance every month. If the minimum RBCA ratio or the minimum NLC is breached, a broker dealer must immediately notify the SEC and CMIC, and shall immediately cease doing business. The SEC had asked the PSE to submit not later than Aug. 28 a full and thorough report on the unprecedented trading halt that hit the exchange last month. The bourse had clarified that the problem stemmed from a middleware -- the software that sends information from the base trading engine to the front-end terminals -- and not from the new platform developed by NASDAQ OMX Group, Inc. SEC Chairperson Teresita J. Herbosa said the commission en banc is set to decide if it will penalize the PSE for last month's unprecedented trading stoppage once the corporate regulator completes the review of the two preliminary reports submitted by the exchange. -- Krista Angela M. Montealegre Business World Ionics answers CMIC query on unusual price movement
LISTED electronics manufacturer Ionics, Inc. told the Philippine Stock Exchange (PSE) it is unaware of any information that caused its share price to surge, after the local bourse's independent regulatory unit asked that it disclose material information.
"In reply to your letter of even date, we are submitting herewith a sworn certification as to the absence of any undisclosed information that could have triggered the unusual price movement of Ionics today, 18 September 2015," Ionics Corporate Secretary and Corporate Information Officer Manuel R. Roxas wrote in a Sept. 18 letter to the Capital Markets Integrity Corp. The company's share price spiked by 49.68% to close at P2.32 apiece last Friday from P1.55, pushing the shares up by 286.67% year-to-date. On the same date, volume went up by 42.57% to 103.8 million traded shares from 72.8 million the day before. Mr. Roxas said that after an inquiry from the board of directors as well as the President and Vice-President for Finance, "I hereby certify that the corporation is not aware of any material undisclosed information that could have triggered" the price movement, except for a newspaper report that said it was partnering with Canadian technology firm LeoNovus, Inc. Ionics had denied the report in a Sept. 18 disclosure, saying "Ionics, Inc. has not entered into any agreement with LeoNovus, Inc." This developed after Ionics announced early this month that it was tapped by International Business Machines Corp. (IBM) for the creation of the US tech giant's Internet of Things platform. Ionics subsidiary Ionics EMS, Inc. will be the "key design partner" and ensure the hardware's specifications will match the platform. Ionics shares yesterday added 68 centavos or 29.31% to close at P3 apiece. -- Daphne J. Magturo Business World PSE suspends Ackerman brokerage anew
The police and monitoring arm of the Philippine Stock Exchange (PSE) has suspended anew the first American-owned stock brokerage in the country.
In a public notice, the Capital Market Integrity Corp. (CMIC) said I. Ackerman & Co. Inc. (IACI) failed to comply with several conditions for the lifting of the trading suspension. "Thus, CMIC has withdrawn the lifting of the involuntary suspension of IACI, effective after the close of trading hours of Aug. 6," the watchdog unit said. "The withdrawal will be operative until IACI strictly and fully complies with the pertinent conditions," CMIC added. In May, CMIC suspended IACI and banned the brokerage firm from directly or indirectly trading on the stock exchange amid violations of PSE rules. The suspension was lifted early in June. CMIC said that during the suspension period, IACI would not be allowed to use the trading facilities of the PSE. "Considering, however, that IACI's involuntary suspension should not prejudice the rights of its clients, particularly those relating to clients' share held by it, clients of IACI can coordinate with IACI," CMIC said. For its part, IACI would be allowed "to effect the procedure that can facilitate any transaction involving clients' shares through off-exchange transactions involving no change in beneficial ownership of shares." IACI was founded by the late Irving Ackerman, a New Yorker who moved to the Philippines and wrote the country's first stock market column. He was one of the founding members of PSE's predecessor Makati Stock Exchange in 1963. Philstar BIR rule seen to trigger capital flight
Nine of the country's most influential business groups-including the entire banking and capital market industry-have warned of capital flight arising from a new Bureau of Internal Revenue (BIR) regulation requiring the submission of an alphabetical list (alphalist) of payees of income payments subject to withholding taxes.
Apart from being "prejudicial" to investors and infringing on the right to privacy, a seven-page position paper drawn up by the business sectors dated July 21 and sent to the BIR last week said the alphalist regulation was in violation of the principle of uniformity of taxation and existing legal requirements, was "impossible" to comply with and would "not serve any useful purpose." Instead, the groups warned that the selldown on preferred shares has started, resulting in P2.12 billion in net foreign selling in the first semester even when the overall market had posted a net foreign buying of P45.67 billion for the period. The paper reported that while the total market capitalization of the local stock market had grown by 11.9 percent so far this year, the market capitalization of preferred shares had retreated by 3.12 percent. "The behavior exhibited by the market is a clear message that investors would rather dispose of preferred shares and forgo the coupon payments rather than being subjected to the alphalist requirement of the BIR," the paper said. Calling for the revocation of the BIR ruling along with a subsequent circular from the Securities and Exchange Commission, the following institutions signed the position paper through their top officials: Bankers Association of the Philippines; Employers Confederation of the Philippines; Federation of Filipino-Chinese Chambers of Commerce and Industry Inc.; Fund Managers Association of the Philippines; Investment Houses Association of the Philippines; Philippine Association of Securities Brokers and Dealers Inc.; Philippine Chamber of Commerce and Industry; the Philippine Stock Exchange; and the Trust Officers Association of the Philippines. BIR Revenue Regulation 1-2014 requires all withholding agents to submit an alphalist of payees of income payments subject to creditable and final withholding taxes. It also prohibits the lumping into a single amount and account of various income payments and taxes withheld. As applied to dividend income payments by listed companies to their investors, it also prohibited listed companies from naming PCD Nominee Corp.-the entity holding the title to all "uncertificated" shares traded in the stock market-as the payee of dividends. This was interpreted by some listed companies, through their transfer agents, to require the disclosure of the names, addresses and tax identification numbers (TINs) of the investors. The groups warned that these regulations, which were issued without the benefit of prior consultations with industry practitioners, were already resulting in either forced retention of dividends or imposition of excessive withholding tax dividend payments, both of which were contrary to law. The paper said these regulations were issued in violation of existing legal requirements, citing the Administrative Code of 1987, which provided that an agency, as far as practicable, must publish or circulate notices of proposed rules and afford interested parties the opportunity to submit their views prior to the adoption of any rule. It also argued that the right to privacy was paramount. They said that brokers and custodians in the equities market, for instance, had a duty of confidentiality to their clients. For custodian banks, this duty is outlined in their custody agreements with clients while for brokers, this duty is set out in client agreements as well as in the rules (Section 8 Article V) of the Capital Market Integrity Corp. The groups also reminded the BIR that disclosure by mutual funds and banks of the identities of their clients would be in violation of the Bank Secrecy law. Inquirer How to protect your rights as an investor
by Jon Carlos Rodriguez
MANILA, Philippines. Investors should be aware of their rights and have certain measures in place to protect themselves from scams and violations of stock market rules. Grace Calubaquib, vice president and head of the surveillance department of the Capital Market's Integrity Corporation (CMIC), said one of the rights of investors is the right to timely disclosures. The Philippine Stock Exchange recently launched an online disclosure system and mobile app called Electronic Disclosure Generation Technology(EDGE) to give investors access to corporate disclosures, financial reports, dividend announcements and company information on their smartphones. Investors also have the right to choose their own brokers, the right to invest in whichever stock they choose, and the right to invest whatever amount they want. But Calubaquib said investors should first take the time to research on companies and brokers before investing. On the CMIC website [http://www.CMIC.com.ph], investors can check a list of licensed brokers to prevent fraud. If you were approached by a salesman, you can check our website to see if he's legit,Calubaquib told ANC's On The Money. CMIC also explains revised trading rules of the Philippine Stock Exchange (PSE) on its website. Calubaquib said the CMIC was created by PSE to answer the call for corporate governance in market regulation. CMIC has jurisdiction over brokers and trading participants, and can implement fines or suspend brokers. They can also recommend the revocation of license of erring brokers. If an issuer or investor is found at fault, CMIC refers to case the Securities and Exchange Commission. CMIC also has jurisdiction over some issuers, but only when its about unusual trading activity and trading-related irregularity,Calubaquib added. ABS-CBNnews.com Maintaining focus and integrity raise the bar
April 27, 2014 10:42 pm
by KIM BERNARDO-LOKIN SPECIAL CONTRIBUTOR They say you can tell a man's passion by the way he speaks about the topic of his choice. Listening to Hans B. Sicat give a recap of what he has done since being installed as the president and chief executive officer of the Philippine Stock Exchange (PSE) on January 2011, it is indeed plain to see that his passion lies in continuously helping transform the local bourse into the best that it can be. I guess from three years ago, the big difference is that you see a fairly resurgent Philippine economy, along with an extremely active capital market,Sicat says. He further breaks down the changes he has since implemented into three: structural, operational and adopting a medium-term strategy for the exchange. He explains structural changes include extended trading hours and the focus on updating technology into PSE Trade, which is the same trading engine that the New York Stock Exchange (NYSE) uses. The new technology removed physical constraints especially with a much bigger volume of trades, which the old one could not handle. In 2011 we were trading at an average of about P5.5 billion a day. In 2013 we were trading at about P10.5 billion average per day.What is even remarkable, he adds, is the record number of transactions on the exchange, with values largely unprecedented, citing 2012 where the PSE was able to raise P219 billion or the equivalent of $4.2 billion dollars. Sicat says the PSE's main mantra is to be a capital markets catalyst. The team is doing this by constantly trying to increase the number of types of transactions, the menu of options of products on the exchange and in the process, deepen the business profile of the Philippines. He cites another example of PSE firsts, such as the launching of an index futures product, currently traded in Singapore. The exchange has also added new services such as an online service bureau, where an internet system for brokers and dealers is privately labeled or customized, and launched the PSE Edge, a new reporting system for companies for updating information and official disclosures, and effect prompt and full compliance from them. Sicat says he really wanted to send a strong signal that he means business. When I first came in, within two months of me sitting as CEO, we delisted about five companies which really should've been delisted years ago but had retained expensive lawyers who managed to keep them there for the longest time possible. Another compliance issue the PSE has been dealing with is the minimum public float, which Sicat says they managed to clean up about a year ago. We told them (companies) non-compliance with the minimum public offer rules can actually get you automatically delisted. In 2012, there were about 47 companies found violating this rule. By the end of the year, there was one company, the PNOC-EC, which we forcibly delisted. Another important structural change, Sicat says is on the governance side. We're currently working with the Securities and Exchange Commission (SEC) for the establishment of theThis, he says, is an industry watchdog with oversight functions for brokers and dealers. While the PSE owns the agency, it is run by independent directors who report directly to the SEC.Capital Markets Integrity Corporation. He says the advantage of CMIC is it eliminates the view of conflict of interest between brokers who are also owners of the exchange, and regulators, too.Along with this, the PSE had also acquired a state-of-the-art surveillance system from the Korea Exchange, which has the ability to monitor and detect yellow or red flags for any misbehavior going on in real-time, and thus promote integrity. Apart from the multitude of changes Sicat has managed to put in place, he also put up the Bell Awards in 2011, which gives recognition to both companies and brokers. Despite these numerous changes, Sicat says his mission is far from over. The biggest challenge for the Philippine corporate markets, he says, just lies ahead with the upcoming Asean integration in 2015. This is a big thing, he points out, because most of the corporates have got to have both a strategic and operational view that I am working on right now, so they will remain competitive beyond the opening up of markets.He believes the government must take a more active approach. In particular, he says, policy-making leadership from the national government doesn't seem to talk about this as one of the most important things, and therefore consciousness on this matter with the man-on-the-street is not very high. With a million and one things to do on his wish list for the exchange and capital markets development, one would wonder if this energetic CEO still has the time to pursue his other interests. With a smile, he says he does, with running and exercise ranking very high on his list. I'm an extremely physically active person, I grew up as a tennis player, although nowadays I run more than I play tennis.He hits the gym every day and tries to do his share in helping the environment on a personal capacity. He also makes sure to have quality time with his family, especially because he has only one remaining with him, as the two others have gone to study college abroad. They also go scuba diving as a family whenever they can, with all his kids getting their certification when they were still young. He also engages with the social media via his twitter account every now and then, to get a feel of what's happening outside his realm. At the end of the day, what's important, Sicat says, is to maintain the focus and integrity in all aspects of your life, whether it be in your personal or work life. After all, it will be what people will ultimately remember you for. Manila Times SEC approves rules on '14 election of PSE board
New set of officers to be named on May 24
By Doris C. Dumlao Philippine Daily Inquirer 12:35 am | Saturday, March 1st, 2014 The Securities and Exchange Commission has approved the rules governing the election on May 24 of the 15-member Philippine Stock Exchange board. Under the approved framework for the PSE's nomination and election committee (Nomelec), broker representatives must not exceed seven while non-brokers are assured of at least seven seats. The 15th seat is allotted for the PSE president. Out of the maximum of seven seats that brokers can occupy in the 15-member board, at least one-but not more than two-should represent the small broker or broker B category. Brokers whose combined volume/value of trade and paid-up capital is below P5.6 billion are classified under category B or small brokers. Those above this level are considered as broker A or big players. In determining the proportional representation of brokers, the volume/value of trade will have a weight of 60 percent while paid-up capital will have a weight of 40 percent. For the seven seats earmarked for non-broker directors, at least three should be independent directors while the rest can represent the interest of corporate issuers, investors and other market participants. There must be at least one representation from each sector. Meanwhile, the SEC also approved the nomination and election committee rules of Capital Markets Integrity Corp. (CMIC). CMIC was created in 2012 as independent entity authorized by the SEC to operate as a self-regulatory organization. It was created to oversee the behavior of market participants and be responsible for market surveillance. It is a separate and independent company from the PSE, governed by independent directors. The framework directs CMIC to have at least four independent directors and one PSE independent director in its board. The charter was also amended to mandate a seven-member board. The CMIC board used to have only five members. http://business.inquirer.net/165083/sec-approves-rules-on-14-election-of-pse-board SEC approves bourse election rules
By: Krista Angela M. Montealegre, InterAksyon.com
February 27, 2014 10:13 PM MANILA - The Securities and Exchange Commission (SEC) on Thursday approved the 2014 Nomination and Election Committee (Nomelec) Rules of the Philippine Stock Exchange (PSE) and Capital Markets Integrity Corp (CMIC). Documents from the corporate regulator show "only minor modifications" were introduced to the PSE's Nomelec and Voting Guidelines, including the "amount of combined value of trade and paid-up capital to determine Category A and B brokers" and "the weight of the volume/value of trade and paid-up capital to determine the proportional representation of brokers." The PSE board will have 15 directors with a term of one year composed of a president; at least seven non-brokers consisting of a minimum three independent directors and three directors representing issuers, investors and other market participants; and seven broker directors. Broker candidates are categorized as belonging to either the Broker A category and Broker B category. The Broker A category shall comprise of brokers with more than P5.6 billion in combined market turnover and paid-up capital, while those with P5.6 billion or less shall belong to the Broker B category. "In view of the increase in the total value turnover of PSE equivalent to 43 percent, the Nomelec increased the cut off last year in the amount of P4.4 billion. By multiplying the weight of 60 percent to the percentage increase of 43 percent, the Nomelec arrived at the cut off of P5.6 billion," the document read. The classification for the seven broker directors was introduced in last year's Nomelec Rules. The volume/value of trade shall have a weight of 60 percent while paid up capital shall have a weight of 40 percent. In the approved Nomelec rules, brokers may exercise their full voting rights in this year's elections "pursuant to the May 5, 2011 Order of the [Regional Trial Court] of Pasig, Branch 159." The Securities Regulation Code states that brokers should not exceed 49 percent of the PSE board and should proportionately represent the Exchange membership in terms of volume or value of trade and paid-up capital. The Exchange will hold its stockholders' meeting on May 24. During last year's election, the existing 15-member PSE board received a fresh one-year mandate. On the other hand, the CMIC will beef up the members of its board of directors from five to seven. This will include four independent directors, one director-president, not more than one director who may be related with a broker-dealer over which the regulator has jurisdiction, and at least one director who has knowledge of the capital markets. PSE president Hans Sicat earlier said the increase in the CMIC's board composition will accommodate "market-savvy board directors." The CMIC commenced operations as an independent audit, surveillance and compliance unit of the bourse in March 2012, allowing the PSE to focus on market and product development. It conducts regular and spot audits on the PSE's trading participants. http://www.interaksyon.com/business/81688/sec-approves-bourse-election-rules Creation of commodities trading put on hold
By Neil Jerome C. Morales
Updated January 6, 2014 - 12:00am MANILA, Philippines - The Philippine Stock Exchange (PSE) is keeping plans for a commodities trading on hold pending the creation of ample infrastructure. The operator of the country's only stock exchange will focus this year on launching more and maximizing recently rolled-out financial products to deepen the capital market, an executive said. I think right now that particular [commodities trading] project is put a bit at the backburner,said PSE president and CEO Hans B. Sicat. During the time PSE studied commodities trading, it encountered difficulties in terms of different standards of measure for rice and the physical delivery of goods, Sicat said. We will make sure we have the full platform and infrastructure. Then it might be easier at that point to look at commodities,Sicat said. In 2011, PSE switched to a new electronic system PSETrade, replacing the Maktrade system that dates back to the unification of the trading operations of the Manila and Makati stock exchanges 15 years ago. The new trading system allows more trading transactions and also has a provision for commodities and derivatives trading. For now, the PSE is sticking to financial products that are easier to launch and regulate, Sicat said. What we'd like to do is to get products that are easier to launch,Sicat said. For instance, PSE launched last year the Exchange-Traded Funds (ETFs), which are securities and investment instruments that monitor a commodity of assets like an index fund but trades like a normal stock in an exchange. PSE is looking to introduce fixed-income ETF and commodity ETFs. Other products in the works are derivatives that will be offered in the Philippines, Sicat said. PSE and Singapore Stock Exchange earlier launched the Philippines-linked derivatives products that is now offered in the Singapore bourse. For 2013, combined market capitalization of PSE-listed firms picked up nearly a tenth to P11.93 trillion from P10.93 trillion in 2012. Average daily turnover value jumped 45 percent to P10.52 billion from P7.26 billion in 2012. Meanwhile, PSE is looking to amend the board composition of Capital Market Integrity Corp. (CMIC) that focuses on monitoring and policing the equities market. The Philippine Star PSE wants market savvy directors in watchdog
By James Loyola
January 5, 2014 The Philippine Stock Exchange is seeking the permission of the Securities and Exchange Commission to expand the Capital Market Integrity Corporation's board to seven directors from the current five. The main change there is to have some market savvy board directors so there is some balance in terms of the views of the board,said PSE president Hans B. Sicat in an interview. He explained that it's not just an academic exercise. (We need) some people who understand how the market works on a practical basis. And I believe that will enhance the work of the CMIC because they will have a broader view of certain things. But that has yet to be formalized and approved by the SEC. According to Sicat, adding market-savvy directors into the CMIC board completes the picture (as it already has) very independent and very smart academically-inclined people. The CMIC is currently headed by Atty. Cornelio Hizon, a former Finance undersecretary and a tax expert who had briefly served as acting International Revenue commissioner in 2002. The SEC granted the CMIC its self-regulatory organization status in 2012 and the watchdog now operates as an independent audit, surveillance and compliance unit for the local stock exchange. CMIC is the successor company of the PSE's Market Regulation Division which was tasked with trading participant regulation and surveillance. The company is governed by a board composed of its president and CEO and four independent directors. Manila Bulletin SEC set to beef up stock market monitoring body
Written by VG Cabuag
05 Jan 2014 THE country's corporate regulator is in discussion of increasing the number of board of directors of Capital Market Integrity Corp. (CMIC), a unit under the Philippine Stock Exchange (PSE), that watches over the integrity of trading in the stock market. PSE President and Chief Executive Officer Hans Sicat said the Securities and Exchange Commission (SEC) is thinking of adding two more slots in the CMIC's board of directors to enhance the body's functions. Sicat said the change in the number of CMIC's board of directors from the current five to seven will be made by getting more market-savvyboard members. In terms of the use of the board will just be an academic exercise but some people should understand how the market works on a practical basis. That will enhance the work of the CMIC because they will have a broader view of certain things. That has to be finalized by the SEC,Sicat said. CMIC was created in 2012 as independent agency authorized by the SEC to oversee the behavior of market participants and surveillance of trading activities. It reports directly to the SEC. The two additional [board of directors] should be market-savvy directors. It completes the picture of having a very independent and very smart academically inclined people who also have market expertise,Sicat said. At the moment, CMIC is headed by Cornelio Hizon, a former Finance undersecretary who served during the term of former Finance chief Jose Isidro Camacho. In the same year that CMIC was organized, it introduced the Total Market Surveillance¿a system that the PSE customized with the help of the Korea Exchange - to monitor stock market transactions. The said system integrates detection rules, statistic analysis models and pattern recognition logics, all of which are needed to maintain a fair market. Business Mirror Biz Buzz: Beefing up CMIC
By the staff
8:40 pm | Sunday, December 29th, 2013 Corporate regulators are in talks to beef up the Capital Market Integrity Corp. (CMIC), the market regulation unit of the Philippine Stock Exchange. CMIC is now headed by Cornelio Hizon, a lawyer and a former Finance undersecretary when Jose Isidro Camacho was the country's Finance chief. Hizon is a tax expert and had briefly served as acting International Revenue commissioner in 2002. PSE president Hans Sicat said discussions with the Securities and Exchange Commission were under way to increase CMIC's board composition from five to seven members. The main change there is to have market-savvy board directors so there's some balance in terms of the views of the board, and not just an academic exercise. That will enhance the work of the CMIC,Sicat said. For Sicat, the proposed board reinforcement completes the picturefor the CMIC board, combining very independent and very smartacademic folks with those with market expertise. (How else can it catch the stock market manipulators and insider traders, huh?) CMIC was created in 2012 as independent entity authorized by the SEC to operate as a self-regulatory organization. It was created to oversee the behavior of market participants and to be responsible for market surveillance. It is a separate and independent company from the PSE, governed by independent directors. It reports directly to the Philippine Securities and Exchange Commission. Doris C. Dumlao Philippine Daily Inquirer Biz Buzz: Change of heart
By the staff
8:25 pm | Tuesday, June 25th, 2013 Speaking of changes, the Philippine Stock Exchange is reconsidering earlier plans to collapse its Capital Market Integrity Corp. (CMIC) into a division within the bourse. Instead of reverting to the antiquated set-up of a market regulation department under its wings, the PSE is now almost sure to keep intact the current CMIC structure, awaiting only an imprimatur from the Securities and Exchange Commission. This sends a good signal that the PSE is continuing - and not backtracking - on efforts to improve governance. SEC chair Teresita Herbosa is supportive of this change in stance. Having a separate, distinct and independent CMIC will keep it true to its role as the private watchdog, thus ensure fair transparent market,Herbosa said in response to a query from Biz Buzz yesterday. Cost is a nagging issue behind the PSE's move to fold back CMIC in its organization. Apparently, the PSE now realizes it can rebootthe CMIC without changing the structure. In other words, change the captain and the crew instead of changing or rocking the boat. The PSE has yet to disclose, however, any changes in CMIC leadership (if any) or what the final structure will be. Doris C. Dumlao Philippine Daily Inquirer Biz Buzz: CMIC vacuum
By the staff
4:42 am | Wednesday, June 12th, 2013 As the Philippine Stock Exchange moves to restructure its capital market surveillance arm partly due to cost consideration, we heard that Antonio Garcia, the incumbent president of Capital Market Integrity Corp. (CMIC), has declined an offer to head the new entity within the PSE that is envisioned to take over CMIC's functions. Our sources said that while the proposed new unit would be mandated to report directly to the Securities and Exchange Commission, Garcia appeared unconvinced that CMIC could preserve its independenceunder the new structure. But speaking of cost considerations, we heard that one complication was that Garcia has a year remaining in his existing three-year management contract. This means that the abolition of the existing CMIC corporate structure as a self-regulatory organization (SRO) and return to the old system of having a divisionwithin PSE will trigger a buyout of the remaining year of service under his chief executive officer contract. So apart from head-hunting for a replacement, the PSE now has to shell out more money to retire Garcia. It would have been easier if Garcia were willing to stay on to finish his term under a revised arrangement, but this seemed implausible given tales of differencesbetween some prime movers of the PSE and the Garcia-led subsidiary CMIC. And as it is difficult to explain why the restructuring will not be a step back for the demutualized local exchange, which will soon expand its product suite with the acquisition of a fixed income trading platform, the buzz is that the PSE may not have entirely ruled out the option to simply rehashCMIC. Either way, there is not likely to be any reinventing of the wheel. It is just a question of changing the tires with a new set or recycling an old set of tires. Whatever the outcome, we can only hope it is for the good of the capital markets. - Doris C. Dumlao Philippine Daily Inquirer PSE, KRX disclosure system up
Fri, Jun 7, 2013
The Philippine Stock Exchange (PSE) has again teamed up with the Korea Exchange (KRX) for the local bourse's new disclosure engine called PSE Electronic Disclosure Generation Technology or PSE EDGE. The PSE said EDGE will be used by listed companies to disseminate their required disclosures. It shall make use of electronic templates so that disclosure information can be easily integrated real-time, upon release to the public, in various systems such as the PSE website and trading terminals, and the systems of data vendors and analysts. PSE EDGE will also be available in a mobile platform where company disclosures can be accessed in a dedicated website or by downloading a mobile application compatible with different operating systems. Prior to this, the PSE had teamed up with KRX for its state-of-the-art surveillance system dubbed, Total Market Surveillanceor TMS. TMS was developed by the Korea Exchange to enhance the capability of CMIC to monitor stock market transactions. The PSE said the establishment of the system, together with the essential collaboration of trading participants, the confidence of the investing public in capital market institutions shall be reinforced further and a more active and vibrant market participation will be truly promoted. Integrated into the TMS system are features such as detection rules, statistic analysis models, and pattern recognition logics which are crucial for maintaining a fair and orderly market. The new surveillance system is dynamic, efficient, scalable and reliable. At the minimum, the system is designed to support a market of 1 million orders/trades per day. TMS could easily adapt to other market instruments and products. The PSE said the full roll-out of the TMS system affirms the bourse's role in enhancing market integrity and transparency. The TMS launch coincided with the PSE's transfer of its regulatory function over trading participants to the Capital Markets Integrity Corporation last year. Manila Bulletin Biz Buzz: Rethinking CMIC
By the staff
10:03 pm | Tuesday, May 28th, 2013 A new structure mulled over by the Philippine Stock Exchange for market regulation - currently under a self-regulatory organization named Capital Market Integrity Corp. (CMIC) - was to keep a professionally run CMIC structure under its wings but the appeals would go straight to the Securities and Exchange Commission (SEC), PSE president Hans Sicat explained. But why does the PSE see the need to restructure CMIC only after a year after its spin-off in the first place? Cost factor is part of the equation especially as PSE has agreed to guarantee the funding for CMIC, Sicat explained. The problem, as we're finding out, is that operational cost is over 100 percent of what it was under the old structure and as the CEO, it's worrisome because we're not talking peanuts here. In theory, it's good (to have a separate unit) but it's a lot harder to manage expenses,Sicat said, noting that he was the one being grilled by the PSE board for CMIC's unbridled expenses. And assuming that the deal to acquire the fixed-income trading platform under Philippine Dealing and Exchange Corp. would happen, Sicat said it was likewise a good time to rethink the structure as these market infrastructure providers move into one big holding company. Does he think CMIC is being overly strict? Sicat said it was just like how the PSE would always complain that the SEC tended to over-regulate. It¿s not so much the rules. What we have to rethink is the model,he said. On the reported overhaul of the five-member CMIC board, Sicat clarified that this was partly due to an order from the SEC changing the definition of independent directorship. Under the new rules, CMIC's two independent directors could not sit as independent directors in other listed companies. As for the leadership of the restructured CMIC, Sicat said Antonio Garcia would likely remain its president. Doris C. Dumlao Philippine Daily Inquirer Stock Exchange reduces funding commitment to watchdog unit
By: Krista Angela M. Montealegre, InterAksyon.com
April 11, 2013 6:45 PM MANILA - The Philippine Stock Exchange (PSE) reduced funding for a unit tasked to oversee trading practices in the bourse. In its regular meeting on March 13, the PSE board approved the adoption of the cost model setting the financial contribution to the Capital Markets Integrity Corp (CMIC) at a fixed amount based on its approved annual budget. Prior to the amendment, 40 percent of the transaction fees was ceded to the CMIC. Hence, in the billing starting March 2013, the full amount of transaction fees and the corresponding taxes (VAT and creditable withholding tax) will accordingly be reflected as due to the PSE (for the VAT) and for the account of the PSE (for the creditable withholding tax),Hans Sicat, PSE president and chief executive officer, said in a notice. He could not be sought to elaborate on the changes. The CMIC commenced operations as an independent audit, surveillance and compliance unit of the bourse in March 2012, allowing the PSE to focus on market and product development. It will be interesting to know what's the reason behind this but definitely the institution needs the support. Is it a lesser commitment on the part of the PSE? We can only speculate,an industry source said. The results of CMIC's investigation on the sudden spike of Calata Corp's stock two weeks after its market debut led the Securities and Exchange Commission to sue 13 individuals, including a ranking official of the financial advisor of the farm input distributor's initial public offering. Since starting operations, the CMIC had reported that the monthly average of violations has dropped to one from the three per broker and the number of brokers subjected to monthly spot audits fell to 9 from 54. CMIC conducts regular and spot audits on the PSE's more than 134 active trading participants. InterAksyon.com SEC seeks law revision requiring insider trader to return gains
By: Krista Angela M. Montealegre, InterAksyon.com
April 3, 2013 9:53 AM MANILA - The Securities and Exchange Commission is putting more teeth into the country's securities law in its fight against insider trading. SEC Chairperson Teresita Herbosa said the regulator wants those who profited from insider trading to return their gains. This is among the proposed revisions to the Securities Regulation Code (SRC). We are proposing some minor amendments to the Securities Regulation Code primarily in order to increase the penalties for insider trading and also maybe to provide for the disgorgement of profits,Herbosa said. In November 2012, the SEC sued 13 individuals, including a ranking official of the financial advisor of Calata Corp's initial public offering, for alleged price manipulation of the farm input distributor's stock where they enjoyed a net gain of P216.05 million. We'd like to strive for a fair and honest capital market¿We'll probably be able to achieve that through vigorous prosecution of securities law violators as well as the imposition of stiffer fines and penalties,Herbosa said. But investigating market irregularities is a tedious process, she said, adding that, The problem is in the gathering of evidence, you have to keep track of all the trades and it's not only for a one-day period. We'll probably be tracking from six months to one year. The SEC recently acquired a surveillance system to prevent and curb fraudulent trading activities. I think we will try to even do it faster and with the all cooperation of course that we will get from the exchange which now has its own integrity corporation, the CMIC, which coordinates with our investor protection surveillance department,Herbosa said. Antonio Garcia Jr, Capital Markets Integrity Corp president and chief executive officer, had said the independent regulatory unit of the Philippine Stock Exchange recommended to the SEC possible regulatory reforms on investments, leveling the playing fieldand strengthening and implementingthe existing rules to aid in the eradication of trading irregularities in the local stock market. InterAksyon.com The online news portal of TV5 Regulators moving stronger versus errant market players
Written by Miguel Camus / Reporter
Thursday, 06 December 2012 19:52 The independently run broker regulation arm of the Philippine Stock Exchange (PSE) is in talks with the Securities and Exchange Commission (SEC) on strengthening enforcement activities against erring stock-market players, a top official said. Antonio Garcia Jr., president of Capital Markets Integrity Corp., said CMIC is in ongoing discussionswith the corporate regulator on possible new measures meant to further level the playing fieldfor investors. We have had meetings with the SEC about changes in some rules,Garcia told reporters in a recent interview. He declined to cite the specific areas of discussion, noting that further talks are needed. Garcia clarified that talks are not meant to create new regulations as the existing rules are already adequate. It's just a question of implementing them [the rules]. These rules have been existing for a long time,Garcia said. Sought for comment, SEC Chairman Teresita Herbosa said discussions with CMIC involve the SEC's plan to acquire a new surveillance system with full connectivity with that of CMIC. CMIC rolled out in May a state-of-the-art surveillance system dubbed Total Market Surveillanceor TMS, which was developed by the Korea Exchange. CMIC, which only received from the SEC its self-regulatory organizationstatus early this year, has been off to a good start. The outfit has been credited for its crucial role in helping unmask a series of trades made by individuals that allegedly manipulated the share price of newly listed Calata Corp. in the two weeks after its initial public offering on May 23. The SEC late last month filed a formal complaint with the Department of Justice against at least 13 individuals, including the financial adviser of Calata Corp., for engaging in illegal-trading activities like painting the tapeand hypebuying. Garcia said CMIC continues to monitor dubious trading activities, which it submits to the SEC. Herbosa told reporters in October that they are looking into nine cases involving possible stock manipulation and insider-trading activities. Garcia said seven of those were uncovered with data gathered by CMIC. We do check on all the data and we submit them to the SEC. It¿s up to the SEC [on what to do next] but we never recommend,he said. Since it was established, CMIC said violations of Securities Laws and Rules by stockbrokers have seen a sharp decline, a previous statement showed. CMIC conducts regular and spot audits on the PSE's 133 active trading participants as part of its regulatory function. From 54 stockbrokers being audited when CMIC first started operations, the figure has declined to just nine trading participants as of last month. The SEC is in the process of updating and overhauling parts of the Securities Regulation Code (SRC) in line with efforts to boost overall investor confidence in the Philippine capital markets, which is one of the best performing globally this year. Herbosa said the updated SRC could be completed before the new year. Business Mirror Less violations in stock trade
Tuesday, 27 November 2012 00:00
The Capital Markets Integrity Corporation, an independent regulatory body of the Philippine Stock Exchange, reported a sharp drop in violations of Securities Laws and rules by trading participants. CMIC conducts regular and spot audits on the exchange's over 133 active trading participants as part of its regulatory function. The spot audit at the start of CMIC operations equalled to 54 Trading Participants and is now down to only nine. The audits exposed the violations of rules and Securities Laws by trading participants resulting in sanctions. CMIC president Antonio Garcia Jr said the strict implementation of the rules is necessary to ensure the integrity of the market to protect investors and sustain the growth of the capital market. Many were surprised when we implemented the rules and penalized some the Trading Participants, they complained,Garcia said. We are not being unreasonable. We are simply implementing the rules. Our goal is to come to a point when no penalties are imposed on brokers because no rule violations are committed. That would mean that we did our job as regulators and that we accomplished the duty that we have been tasked to do. The CMIC identified 29 commonly violated rules including five related to customer account information (one is a serious breach of the country's anti-money laundering law that requires stock brokers to know their clients and conduct face to face meetings with them when creating new accounts). Malaya Business Insight CMIC reports decline in violations of rules
Written by Tribune
Monday, 26 November 2012 00:00 The Capital Markets Integrity Corp. (CMIC), an independent regulatory body of the Philippine Stock Exchange (PSE), reported a sharp drop in violations of Securities Laws and rules by trading participants. CMIC conducts regular and spot audits on the exchange's over 133 active trading participants as part of its regulatory function. The spot audit at the start of CMIC operations equalled to 54 trading participants and is now down to only nine. The audits exposed the violations of rules and securities laws by trading participants resulting in sanctions. CMIC president Antonio Garcia Jr. said the strict implementation of the rules is necessary to ensure the integrity of the market to protect investors and sustain the growth of the capital market. Many were surprised when we implemented the rules. When we penalized some of the trading participants, they complained,Garcia said. We are not being unreasonable. We are simply implementing the rules. Our goal is to come to a point when no penalties are imposed on brokers because no rule violations are committed. That would mean that we did our job as regulators and that we accomplished the duty that we have been tasked to do,he said. The CMIC identified 29 commonly violated rules including five related to customer account information (one is a serious breach of the country's anti-money laundering law that requires stock brokers to know their clients and conduct face to face meetings with them when creating new accounts). PSE unit sees sharp drop in violations
By Zinnia Dela Pena
Updated November 26, 2012 - 12:00am MANILA, Philippines - The Capital Markets Integrity Corp. (CMIC) has seen a sharp drop in infractions of securities laws and rules committed by stockbrokers, according to its top official. CMIC is an independent audit, surveillance and compliance unit of the Philippine Stock Exchange (PSE) that started operations in March. Antonio Garcia Jr., president of CMIC, noted that the number of securities laws and rules violations decreased from a monthly average of three per broker to one per broker. He said the number of brokers subjected to monthly spot audit likewise declined to nine from 54. As regulators, we take this as a good sign for the capital markets industry. It means that brokers are becoming more interested in knowing what the rules are and how to comply with them,Garcia said. Garcia is looking forward to the day when no penalties are imposed on the exchange's 133 trading participants. It would be a mark of success for us regulators if there comes a time when no penalties are imposed on brokers because no rule violations are committed. That would mean that we did our job as regulators and that we accomplished the duty that we have been tasked to do. With your help, this may be possible if we work together, not as regulator and regulated entities, but as partners working towards a common goal,Garcia pointed out. The Philippine Star CMIC reports drop in number of stock traders' violations
By: InterAksyon.com
November 25, 2012 3:12 PM MANILA - Violations of securities laws and regulations by Philippine Stock Exchange trading participants have dropped, the Capital Market Integrity Corp said over the weekend. In a statement, CMIC president Antonio Garcia Jr. said the monthly average of violations has dropped to one from the three per broker when the CMIC, an independent regulatory arm of the PSE, began operations. Garcia said the number of brokers subjected to monthly spot audits likewise fell to 9 from 54 when the CMIC started. CMIC conducts regular and spot audits on the PSE's more than 133 active trading participants. Many were surprised when we implemented the rules. When we penalized some of the trading participants, they complained,Garcia said. We are not being unreasonable. We are simply implementing the rules. Our goal is to come to a point when no penalties are imposed on brokers because no rule violations are committed. That would mean that we did our job as regulators and that we accomplished the duty that we have been tasked to do,he said. According to the CMIC, 29 violations are common among trading participants, including five related to customer account information. One of the five is a serious breach of the country's Anti-Money Laundering Act, which requires stock brokers to know their clients and conduct face to face meetings with them when creating new accounts. InterAksyon.com The online news portal of TV5 The sooner the better
Philippine Daily Inquirer
8:04 pm | Monday, October 15th, 2012 We said it over two months ago: With the discovery by the Philippine Stock Exchange of potential price manipulation activities involving the shares of a particular listed company¿and the turnover of such information and evidence to the corporate regulator - the ball is now in the court of the Securities and Exchange Commission. Critics of the PSE have described it as an old boys'clubwhere the well-connected merrily make money while the rest of the investors lose their shirts in the hype and dumpschemes of jinetes(jockeys) who rig prices for their (and their friends') advantage. Even corporate regulators and the current crop of economic managers have called out the PSE leadership to clean up the ranks by reforming the way the stock market is run. Capital Markets Integrity Corp., an independent unit of the PSE, has been assigned to investigate certain participants' suspicious activities within the bourse. Eager to prove its doubters wrong, CMIC has thrown itself into the task of looking into potential stock market abuses with gusto. Suspected cases of stock market manipulation and insider trading have been detected, thanks to the group's state-of- the-art computer system. This system, which came at no small cost, can detect potentially illegal patterns that are difficult to spot through manual observation. CMIC has actually gone above and beyond the call of duty.It has hired private investigators to follow the paper trail of one suspected stock manipulation case, which now looks increasingly like a case of money laundering. But because CMIC is not empowered to prosecute suspected market abuses (a power reserved by the law for the corporate regulator), all the evidence it has gathered has been turned over to the SEC for the latter's action. And there lies the problem. It has been more than four months since the government corporate watchdog was apprised of this situation, and we have yet to see any concrete result. In today's world of financial markets, where mere seconds can make or break investors, let alone unsuspecting small players in the retailsphere, four months of inaction is an eternity. In four months, stock market manipulators and those involved in insider trading can make scads more money. In four months, unsuspecting investors using their hard-earned stash can lose it all. CMIC, despite having the approval of its operating license delayed for many months (by the SEC, no less), acted with dispatch when faced with a situation where it had to act against suspected violations by stock market stakeholders. And it continues to perform admirably, having provided the SEC the information to prosecute seven of the nine cases now being probed by the regulator, despite having to operate only on a provisional license. We understand that, being a government agency, the SEC is understaffed and often has insufficient resources to go after every suspected violator in a timely manner. But given the ribbing that the PSE has suffered from reform-minded government officials, it is perhaps only appropriate that due attention be given by the government to rewarding exemplary behavior on the bourse's part. For the Philippine economy to grow at a pace needed to lift more people out of the morass of poverty, a well-oiled, transparent and dynamic stock market is critical. It is critical for helping investors allocate capital efficiently, whether to listed companies that will build more roads and bridges or to firms that will bring cheaper and faster Internet services to the countryside. For this to happen, both the government and the private sector have to be on the same page, facing the same direction, acting with the same urgency toward reform. Recently, we heard SEC Chair Teresita Herbosa announce that the regulator would complete its own investigation by the end of October. This is a welcome development, and the local and foreign investment communities are waiting to see whether the government side would actually put its money where its mouth is, especially since the PSE did the same four months ago. And to be consistent with our earlier analogy, the ball is deep inside the SEC's court, so deep that it is now approaching the baseline, at risk of being dropped and going out of bounds, like all previous investigations concerning financial market abuses. Action is needed, and the sooner the better. Philippine Daily Inquirer Stock manipulation
Philippine Daily Inquirer
11:06 pm | Monday, August 6th, 2012 The discovery of stock price manipulation involving shares of the recently listed agricultural trading firm Calata Corp. indicates that it's not business as usualin the local bourse. The Philippine Stock Exchange has indeed evolved from the old boys' club of the 1980s to a professionally run exchange. Taking center stage in the stock exchange's drive to prevent unscrupulous trading is the independently run Capital Markets Integrity Corp. (CMIC), a unit of the Philippine Stock Exchange mandated to curb price manipulation and insider trading. Armed with a self-regulatory status, the CMIC has the power to sanction erring member-brokers with suspension, fines or a revocation of license. However, recommendations for court prosecution must still be referred to the Securities and Exchange Commission, which may draft a criminal complaint that, in turn, is to be submitted to the Department of Justice for legal action. Last May 8, the CMIC launched a state-of-the-art surveillance system called Total Market Surveillanceor TMS, which was developed by the Korea Exchange (KRX). CMIC said it was very advanced and customized to Philippine conditions that even the Korean bourse commented that after the PSE's enhancements, the local system was now even betterthan the original. The private-sector watchdog acquired the new surveillance system just before Calata's P270-million initial public offering (IPO) and subsequent listing on May 23. Calata shares rose on its first day as a public firm to P7.70 each from an initial offer price of P7.50. In two weeks after listing, however, trades of Calata shares reached P4 billion and the stock price soared to P23.95, only to plummet to P8 in just four days. The SEC was furnished late last month with the CMIC investigation results that reportedly presented a clear caseof manipulation of the stock price of Calata. The Inquirer quoted sources who saw the report as saying that the CMIC had identified several persons who engaged in the unscrupulous trading of Calata shares. The CMIC believed they were only dummies(some of them live in Bulacan where Calata's operations are located) who were not sophisticated or moneyed enough to do such trades. The investigation has also traced those who had given money to finance those transactions, and it believes this is not the first time that this group has committed such infraction. We trust that, with the establishment of the [surveillance] system, together with the essential collaboration of trading participants, the confidence of the investing public in capital market institutions shall be reinforced further and a more active and vibrant market participation will be truly promoted,said CMIC chair Jose Luis Javier. That confidence was shattered by the infamous BW Resources scandal in 1999 involving businessman Dante Tan, a friend of ousted President Joseph Estrada, and a number of stockbrokers. Capitalizing on his close relations with Estrada, Tan was able to secure gambling licenses for BW from the state-owned Philippine Amusement and Gaming Corp. This aroused interest among brokers and investors in BW. Then came reports that Macau's gambling tycoon Stanley Ho was investing in the company. BW defied the depressed sentiment in the stock market arising from the financial crisis of 1997 such that in just a year (from October 1998 to October 1999), BW shares surged a mind-boggling 18,000 percent to P145 from only 80 centavos. This irregular price movement triggered investigations and a PSE probe found enough evidence to build a case against Tan and a number of local brokerage firms that allegedly helped the BW owner manipulate the company's stock price. In December 2000, the justice department charged Tan and several other cohorts with price manipulation. It said Tan violated the Revised Securities Act for engineering the rise in BW's share price in 1999 and failing to disclose his beneficial ownershipin the gaming company. Sadly, the lower court dismissed the criminal complaint. But in 2009, the Court of Appeals reversed the lower court's decision and ordered the criminal prosecution of Tan and company for the insider trading and stock price manipulation scandal. Tan has reportedly fled the country and the case remains pending in court. More than a decade since the BW scandal nearly caused the collapse of the local stock market, the government has yet to convict anyone of insider trading or price manipulation. In the current case of Calata, the ball is again in the hands of the SEC. This gives it a big opportunity to show that it too can be part of the Aquino administration's matuwid na daancrusade. Philippine Daily Inquirer Stock manipulation, insider trading probed
Philippine Daily Inquirer
11:06 pm | Monday, August 6th, 2012 The discovery of stock price manipulation involving shares of the recently listed agricultural trading firm Calata Corp. indicates that it's not business as usualin the local bourse. The Philippine Stock Exchange has indeed evolved from the old boys' club of the 1980s to a professionally run exchange. Taking center stage in the stock exchange's drive to prevent unscrupulous trading is the independently run Capital Markets Integrity Corp. (CMIC), a unit of the Philippine Stock Exchange mandated to curb price manipulation and insider trading. Armed with a self-regulatory status, the CMIC has the power to sanction erring member-brokers with suspension, fines or a revocation of license. However, recommendations for court prosecution must still be referred to the Securities and Exchange Commission, which may draft a criminal complaint that, in turn, is to be submitted to the Department of Justice for legal action. Last May 8, the CMIC launched a state-of-the-art surveillance system called Total Market Surveillanceor TMS, which was developed by the Korea Exchange (KRX). CMIC said it was very advanced and customized to Philippine conditions that even the Korean bourse commented that after the PSE's enhancements, the local system was now even betterthan the original. The private-sector watchdog acquired the new surveillance system just before Calata's P270-million initial public offering (IPO) and subsequent listing on May 23. Calata shares rose on its first day as a public firm to P7.70 each from an initial offer price of P7.50. In two weeks after listing, however, trades of Calata shares reached P4 billion and the stock price soared to P23.95, only to plummet to P8 in just four days. The SEC was furnished late last month with the CMIC investigation results that reportedly presented a clear caseof manipulation of the stock price of Calata. The Inquirer quoted sources who saw the report as saying that the CMIC had identified several persons who engaged in the unscrupulous trading of Calata shares. The CMIC believed they were only dummies(some of them live in Bulacan where Calata's operations are located) who were not sophisticated or moneyed enough to do such trades. The investigation has also traced those who had given money to finance those transactions, and it believes this is not the first time that this group has committed such infraction. We trust that, with the establishment of the [surveillance] system, together with the essential collaboration of trading participants, the confidence of the investing public in capital market institutions shall be reinforced further and a more active and vibrant market participation will be truly promoted,said CMIC chair Jose Luis Javier. That confidence was shattered by the infamous BW Resources scandal in 1999 involving businessman Dante Tan, a friend of ousted President Joseph Estrada, and a number of stockbrokers. Capitalizing on his close relations with Estrada, Tan was able to secure gambling licenses for BW from the state-owned Philippine Amusement and Gaming Corp. This aroused interest among brokers and investors in BW. Then came reports that Macau's gambling tycoon Stanley Ho was investing in the company. BW defied the depressed sentiment in the stock market arising from the financial crisis of 1997 such that in just a year (from October 1998 to October 1999), BW shares surged a mind-boggling 18,000 percent to P145 from only 80 centavos. This irregular price movement triggered investigations and a PSE probe found enough evidence to build a case against Tan and a number of local brokerage firms that allegedly helped the BW owner manipulate the company's stock price. In December 2000, the justice department charged Tan and several other cohorts with price manipulation. It said Tan violated the Revised Securities Act for engineering the rise in BW's share price in 1999 and failing to disclose his beneficial ownershipin the gaming company. Sadly, the lower court dismissed the criminal complaint. But in 2009, the Court of Appeals reversed the lower court's decision and ordered the criminal prosecution of Tan and company for the insider trading and stock price manipulation scandal. Tan has reportedly fled the country and the case remains pending in court. More than a decade since the BW scandal nearly caused the collapse of the local stock market, the government has yet to convict anyone of insider trading or price manipulation. In the current case of Calata, the ball is again in the hands of the SEC. This gives it a big opportunity to show that it too can be part of the Aquino administration's matuwid na daancrusade. Philippine Daily Inquirer Enhanced regulation at the Philippine stock market
By Nick Raquel
May 10, 2012 CAPITAL markets play a very important role in the development of market economies. While fostering the development of market-based economies, they also play an equalizing role as they provide venues for the greater number of people to share in investment opportunities as well as business and market risks. Basic in any capital market is the presence of an effective regulatory system where rules and enforcement are fairly and efficiently imposed to all players. Public confidence in traded securities demands full disclosure (at initial offering and on a continuing mode) and the surveillance of trading activity. It is noteworthy that the Philippine capital market has arrived with its consistent drive to maintain market confidence. The regulatory framework of the Philippine Stock Exchange (PSE) evolved from the Market Integrity Board of the PSE to a Capital Markets Integrity Corp. (CMIC), a separate entity from the PSE. CMIC ensures regulatory independence over audit, surveillance and compliance activities of the trading participants. In keeping with its resolve to be a world class regulator, the CMIC just launched its new Total Market Surveillance (TMS) on May 8, with key market players in attendance including the country's corporate watchdog, the Securities and Exchange Commission represented by no less than the SEC Chairman, Teresita J. Herbosa and the SEC Associate Commissioner Maria Juanita E. Cueto. The computer-aided TMS was developed by the Korea Exchange to enhance the monitoring of the stock-market transactions. The system is founded on the existing regulatory rules of PSE and is capable of recognizing and evaluating trade patterns and behaviors. Premised on statistical detection models and driven by the logic of pattern recognition, the new TMS is expected to generate objective findings that may pave the way for faster resolution of cases. References to previous cases through electronic archiving is also facilitated by the system. With the continuing improvements in the regulatory system of the Philippine stock market, it is no surprise that new highs in the market indices have been registered. With a vibrant capital market, the country's investment rating is indeed within reach. Business Mirror PSE rolls out surveillance system
By Zinnia dela Pena
Updated May 9, 2012 - 12:00am MANILA, Philippines - Aiming to develop a culture of transparency and integrity, the Philippine Stock Exchange rolled out yesterday a modern, state-of-the art surveillance system designed to proactively and rapidly identify abnormal trading behaviors. Developed by the Korea Stock Exchange, the system, called Total Market Surveillance (TMS), is intended to beef up the surveillance capability of the PSE's Capital Markets Integrity Corp. (CMIC) given the current fast paced, electronic trading environment. CMIC president Antonio Garcia Jr. said the TMS will enable the PSE to conduct further investigations and crack down on price manipulation and other illegal or unregulated trading prices. The system is equipped to monitor at least one million orders/trades per day. The system takes a real-time data feed directly from the exchange's trading engine, processes it in real time, automatically spots anomalies and generates alerts. Garcia, a former president of the Manila Stock Exchange, said the system plays a vital role in assuring investors that the PSE is fully committed in creating an efficient, transparent and fair marketplace. He, however, noted that the delinquencies of brokers had been minimized over the past few years. My dream is that we would never have to penalize any of the trading participants because they will be following the rules. We want to have a dialogue with them and know what their problems are,Garcia said. The CMIC was created to ensure the regulatory independence over the audit, surveillance and compliance activities of trading participants. The Philippine Star Local bourse rolls out new stock trading surveillance system
By Doris C. Dumlao
12:51 pm | Tuesday, May 8th, 2012 MANILA, Philippines - The Capital Markets Integrity Corp., a self-regulatory organization tasked to police trading participants, has boosted efforts to build a culture of transparency, integrity and compliancewith the rollout on Tuesday of a new surveillance system that detects unusual spikes in price and volume of listed stocks. CMIC, a unit of the Philippine Stock Exchange tasked to curb stock price manipulation and insider trading, is headed by Antonio Garcia, a former president of the Manila Stock Exchange. By hiring someone who knows the ins and outs of stock brokerage, the PSE said it aimed to put the CMIC off to a good start. With its self-regulator status, the CMIC has the power to sanction erring member-brokers such as with suspension, fines or revocation of license but recommendations for court prosecution must be referred to the Securities and Exchange Commission. On Tuesday, the CMIC launched its state-of-the-art surveillance system dubbed Total Market Surveillanceor TMS, which was developed by the Korea Exchange (KRX). My dream is we will get to a point where we don't have to sanction any of the trading participants because they will be following the rules,Garcia said. To date, Garcia said, delinquency among trading participants has been minimized, and that will be gone in a short time. For the TMS, Garcia said, the CMIC picked the best features of the surveillance system that was developed by KRX. We like their system. It's very advanced and we customized it to Philippine conditions,Garcia said, adding that even the KRX had noted that after the PSE's enhancements, the local system was now even betterthan South Korea's original system. Integrated into the TMS are features such as detection rules, statistics analysis models and pattern recognition logics seen as crucial for maintaining a fair and orderly market. At the minimum, the system is designed to support a market of one million orders/trades per day. We trust that, with the establishment of the system, together with the essential collaboration of trading participants, the confidence of the investing public in capital market institutions shall be reinforced further and a more active and vibrant market participation will be truly promoted,said CMIC chairman Jose Luis Javier. CMIC now has a full complement of 24 people in four departments, with surveillance, audit, enforcement and administrative functions. As markets become more vulnerable to manipulation and price distortions, no exchange can exist without an efficient and state-of-the-art surveillance systems. With surveillance comes vigilant monitoring and effective deterrence,said SEC chairperson Teresita Herbosa who graced the launch of the TMS. Herbosa said the SEC itself would likewise soon acquire its own surveillance system to boost the fight against market abuses. But apart from alerts generated from surveillance systems, she said regulators would also act on tips, complainants and referrals. The full rollout of the TMS system affirms CMIC's role in enhancing market integrity and transparency. We also share CMIC's advocacy in promoting investor education as we jointly develop a progressive Philippine capital market,PSE chair Jose Pardo said. Veteran stock broker Ramon Garcia, who was PSE president in the 2000s, said CMIC should not only act as policement but should commend good performers among brokers and it should create suitable environment to encourage more investors to participate in the market. The former PSE chair said joint efforts should be made between CMIC and brokers to increase the number of investors, which as of latest count was less than 1 percent of the Philippines' 95-million population. Philippine Daily Inquirer New system to monitor stock transactions launched
ABS-CBNnews.com
05/08/2012 2:03 PM | Updated as of 05/08/2012 5:31 PM MANILA, Philippines - A new state-of-the-art system to monitor transactions at the stock market was launched on Tuesday. The Capital Markets Integrity Corporation (CMIC), a subsidiary of the Philippine Stock Exchange, itroduced the Total Market Surveillance (TMS). The TMS, which was developed by the Korea Exchange, is aimed at enhancing the CMIC's capability to monitor stock market transactions. We trust that, with the establishment of the system, together with the essential collaboration of trading participants, the confidence of the investing public in capital market institutions shall be reinforced further and a more active and vibrant market participation will be truly promoted,CMIC Chairman Jose Luis Javier said, in a statement. The TMS system integrates detection rules, statistic analysis models, and pattern recognition logics, which are needed to maintain a fair market. The new system is designed to support a million orders/ trades a day at a minimum. It can also be adapted to other market instruments and products. The full roll-out of the TMS system affirms CMIC's role in enhancing market integrity and transparency. We also share CMIC's advocacy in promoting investor education as we jointly develop a progressive Philippine capital market,PSE Chairman Jose T. Pardo said, in a statement. ABS-CBN News New surveillance system launched in local bourse
Tuesday, May 8, 2012
TO ENSURE the independence and integrity of the local bourse, a state-of-the-art surveillance system was launched on Tuesday, the Philippine Stock Exchange (PSE) said. PSE's subsidiary, Capital Markets Integrity Corporation (CMIC), unveiled the new surveillance system dubbed as Total Market Surveillanceor TMS. TMS was developed by the Korea Exchange to enhance the capability of CMIC to monitor stock market transactions. CMIC was created to ensure the regulatory independence over the audit, surveillance and compliance activities of trading participants. We trust that, with the establishment of the system, together with the essential collaboration of trading participants, the confidence of the investing public in capital market institutions shall be reinforced further and a more active and vibrant market participation will be truly promoted,CMIC chairman Jose Luis Javier said. Integrated into the TMS system are features such as detection rules, statistic analysis models, and pattern recognition logics which are crucial for maintaining a fair and orderly market. The new surveillance system is dynamic, efficient, scalable and reliable. At the minimum, the system is designed to support a market of 1 million orders/trades per day. TMS could easily adapt to other market instruments and products. The full roll-out of the TMS system affirms CMIC's role in enhancing market integrity and transparency. We also share CMIC's advocacy in promoting investor education as we jointly develop a progressive Philippine capital market,PSE Chairman Jose Pardo said. (SDR/Sunnex) Sun Star Manila SEC Approves PSE Watchdog Unit
By James A. Loyola
March 14, 2012, 12:23am MANILA, Philippines - The Securities and Exchange Commission (SEC) has approved the start of the operations of the Capital Markets Integrity Corporation (CMIC) as an independent audit, surveillance and compliance unit for the local stock exchange. CMIC is the successor company of the Philippine Stock Exchange's Market Regulation Division which was tasked with trading participant regulation and surveillance. The company is governed by a board composed of its president and CEO and four independent directors. In an order dated March 9, 2012, the SEC said that it granted CMIC's request to start operations effective March 12, 2012 after the SEC's evaluation and CMIC's representation that its governance structure, personnel and systems are ready to function. After many months of hard work and preparations, we now have the CMIC in full swing. We are pleased with this development as this will only further our objectives of enhancing governance and market integrity in the stock market,said PSE president Hans B. Sicat. CMIC president Antonio Garcia Jr. added that the board and management of CMIC are grateful to the SEC for its show of strong support in ensuring a fair and transparent market. The SEC earlier granted CMIC a provisional Self Regulatory Organization (SRO) status or the authority to operate as the independent audit, surveillance and compliance unit of the PSE. The provisional SRO was subject to review by the SEC after six months and the full status as SRO was granted once the SEC was convinced that the CMIC is now able to operate pursuant to its mandate. The CMIC last year signed an agreement with the Korea Exchange for the acquisition and implementation of a surveillance system which will enhance its capability to monitor stock trading activities and strengthen market integrity. The said system, called Exture Surveillance System, is targeted to be operational by the first half of 2012. Manila Bulletin PSE's CMIC Gets SRO Status
By James A. Loyola
February 8, 2012, 11:28pm MANILA, Philippines - The Philippine Stock Exchange (PSE) lauded the decision of the Securities and Exchange Commission (SEC) to grant the Capital Markets Integrity Corporation (CMIC) a self regulatory organization status (SRO). The CMIC was granted a provisional SRO status or the authority to operate as the independent audit, surveillance and compliance unit of the PSE. The provisional SRO shall be subject to review by the SEC after six months and the full status as SRO may be granted once the SEC is convinced that the CMIC is able to operate pursuant to its mandate. This is one of the cornerstone milestones for the equities market in terms of enhancing the corporate governance structure for market regulations. This positive development will also allow the PSE to focus on market and product development,said PSE president Hans B. Sicat. CMIC president Antonio Garcia Jr. said the board and management of CMIC are thankful to the SEC for its vote of confidence on CMIC and our commitment to market reforms. Last year, the CMIC signed an agreement with the Korea Exchange for the acquisition and implementation of a surveillance system which will enhance its capability to monitor stock trading activities and strengthen market integrity. The said system, called Exture Surveillance System, is targeted to be operational by the first half of 2012. Integrated into the EXTURE surveillance system are detection rules, statistic analysis models, benchmarks and accounts relation and pattern recognition logics. The accuracy of these analysis models is crucial for maintaining a fair and orderly market. The new surveillance system also features an Integrated Visual Analysis System (IVAS) tool that can visually illustrate the market at a glance. Such a function reduces the average analysis and investigation time thereby increasing the efficiency of the whole market surveillance operations. The new surveillance system is dynamic, efficient, scalable and reliable. At the minimum, the system is designed to support a market of 1 million orders/trades per day. EXTURE can also adapt to any type of cash (whether equities or fixed-income instruments), derivatives inter-linked markets in the world. CMIC is the successor company of the PSE's Market Regulation Division which was tasked with trading participant regulation and surveillance. The company is governed by a board composed of its president and CEO and four independent directors. Manila Bulletin PSE spins off regulation unit
By Doris C. Dumlao
10:29 pm | Friday, February 3rd, 2012 The Securities and Exchange Commission has allowed Capital Market Integrity Corp. (CMIC), the market regulation unit of the Philippine Stock Exchange, to be spun off into an independent entity and operate as a self-regulatory organization (SRO). The SRO status given to the CMIC, which is also enjoyed by the PSE, allows the market regulation company to formulate its own rules and police its constituents. Asked to comment on the approval, PSE chair Jose Pardo said in a text message to the Inquirer that this was very timely as SRO status of CMIC will further enhance confidence in our capital markets. Also, CIMC can now fully function as an organization independent of PSE,Pardo added. Based on documents from the SEC, the corporate watchdog approved the SRO status after the CMIC complied with its requirements, particularly the signing of a memorandum of agreement with the PSE to address the following: set out the protocol among the officials and employees of the two entities in the handling of data and information necessary for the effective surveillance and detection of trading-related irregularities and unusual trading activities; and delineate jurisdiction on enforcement of listing, disclosure and trading rules; and address concerns over records of PSE-market regulation department and market integrity board and the cases and other matters pending with these units. CMIC is chaired by Jose Luis Javier while the president is Antonio Garcia Jr. Other key personnel are: Grace Calubaquib (head of surveillance) and Renee Lynn Miciano (head of investigation and enforcement). There are four people currently employed by the PSE's market regulation department who will be absorbed by the CMIC: Elvira Feliciano (head of regular examination); Maria Bernadette Bucalig (head of risk management); Desiree Amor Franco (auditor) and Victoriano Miguel Pareja (surveillance analyst). The new entity is also scouting for additional personnel. Philippine Daily Inquirer |
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