PSE okays new commission rates for equity transactions

The Philippine Stock Exchange (PSE) has approved a new set of minimum commission rates for transactions covering equity and equity-related products.

The new rates, which will be based on transaction value, was effective Oct. 23.

The PSE will require a .0015 minimum commission rate for stock transactions amounting to over P100 million but not more than P500 million. A .0008 minimum commission rate, on the other hand, will be charged to trades valued at above P500 million to P1 billion.

For transactions amounting to over P1 billion, the minimum commission rate will be subject to negotiations instead of a standard system.

The rates, according to the PSE, should be inclusive of any applicable value added tax or gross receipt tax as the case may be.

For transactions valued at P100 million and below, the minimum commission rate earlier approved by the PSE board at one fourth of one precent or 25 basis points shall remain effective and shall be exclusive of the applicable VAT or GRT.

The PSE board has also agreed to impose sanctions on brokers who will not comply with the minimum commission rate requirement. For first-time violators, the PSE will slap a fine of not more than P2.5 million and/or suspension of not more than five consecutive business days.

Those that will be found to have violated the same requirement for the second and third time will be meted a penalty of not more than P5 million and/or a 10-day suspension and a P10-million fine and/or a 15-day suspension, respectively.

A report by the PSE’s strategic development committee said the introduction of a standard commission rate system in Thailand had brought about positive results. It said the new scheme had promptly improved the financial operations of most brokers.

The Hongkong Stock Exchange imposes a 0.25-percent minimum rate while the Kuala Lumpur Stock Exchange requires a .07-percent minimum commission rate for stock transactions amounting to 100,000 ringgit and below.

With the new commission rate system, the PSE expects its member-brokers to focus on improving their infrastructure and enhancing value added services to clients.