The thematic audit, which will run from Oct. 1 to Nov. 30, 2003, is intended to check the broker-dealer firms’ compliance with the provisions of the Securities Regulation Code.
SEC Markets Regulation Department director Jose P. Aquino has urged broker-dealers to make their books and records readily available. The purpose of the audit is to avoid potential gaps in separate on-site inspections.
Aquino said the move is in line with the SEC’s efforts to provide adequate protection to the public and ensure that broker firms comply with the securities law.
He said the SEC may, on its own initiative, conduct periodic or parrallel examinations of PSE member-brokers to validate the exchange’s findings.
Aquino said the SEC will not hesitate to enforce sanctions against broker firms that will be found in violation of the securities law.
It would be recalled that in 1999 some broker-firms owned by PSE directors refused to open their books and records to the exchange’s Compliance and Surveillance Group (CSG).
This was the same reason why the SEC ordered last year the creation of a separate Compliance and Surveillance Department to look into possible violations of securities regulations by stockbrokers.
The CSG is a critical unit of the PSE that monitors market conditions and trading activities to detect violations of the securities law and exchange rules, including sales practices and financial and operational requirements.