Singapore broker to resume trading RP stocks

Singapore-based OCBC Securities has joined the bandwagon of foreign stockbrokers expressing interest to resume their operations at the Philippine Stock Exchange (PSE) following the decision of the Securities and Exchange Commission (SEC) to put a stop to voluntary suspensions.

But instead of reactivating its Philippine office, OCBC, which went on voluntary suspension this year, indicated it would rather operate off-site, or through an online trading scheme where it would take and executive orders electronically from its Singapore headquarters.

SEC Chairperson Lilia Bautista said OCBC’s proposal is not objectionable, considering its willingness to resume its trading business in the country, but the brokerage firm should first look into the legal and technical implications of its decision.

Online trading is not new at the PSE as a number of stockbrokers are already offering this alternative service to clients. Among them are pioneering online broker Diversified Securities (through dfnn.com), BPI Securities, RCBC Securities, AB Capital Securities and F. Yap Securities.

Bautista added OCBC should also clear its papers at the PSE and SEC since it is still on voluntary suspension.

In a Dec. 6 order, the SEC said brokers/dealers will no longer be allowed to go under voluntary suspension and instead will be treated as new registrants should they decide to resume operations.

Those already under voluntary suspension and who intended to resume operations were given until last Dec. 14 to pay their renewal fees.

The SEC’s decision to disallow voluntary suspension was prompted by inquiries from brokers who have previously suspended their operations but continue to seek the renewal of their licenses or register anew as brokers and/or dealers.

Under the resolution, brokers who have ceased operations and would re-apply for registration would then be subject to the revised capitalization rules which impose a minimum paid-up capital of P100 million for new registrants.

At present, active brokers need only to post a minimum net capital of P10 million, inclusive of a P5-million surety bond for brokers. In addition, a P1-million surety bond for dealers is required, as the SEC has permitted the dual roles of broker-dealer.

On the other hand, brokers who have suspended their operations are only required a P2-million minimum net capital base.

Out of the 184 member-brokers that made it to the stockholders list of the demutualized PSE, only 136 are still actively trading as a result of poor market conditions.

Since 1998, a number of stockbrokerage firms – most of whom are foreign units – have temporarily halted their operations through voluntary suspensions for various reasons.

They include All AsiaSecurities Management Corp., Citicorp Securities International, E*Trade Securities, FEB Stock Brokers, Orion-Squire Capital, PJB Pacific Securities, Topwin Securities, UOB Securities, UPCC Securities, WorldSec Securities, Merrill Lynch, G.K. Goh Securities, HSBC Securities, Guoco Securities, and Rashid Hussain Securities.

Earlier, five other foreign brokers (BNP Paribas Peregrine Securities, Nomura Securities, Magnum International Securities, Keppel Securities and SG Securities), indicated they would return to active trading by renewing their annual fees for brokers/dealers. – Conrado Diaz Jr.