The move was in response to PSE’s request for it to take over the management of ACE after finding "reasonable grounds" it violated provisions of the Securities Regulation Code, on top of the brokerage house’s financial condition.
A cease and desist order was recently issued by the SEC against ACE for severals violations of the src, among them on fraudulent transactions and restrictions on borrowings by members, brokers and dealers.
As of end-September this year, the trial balance of ACE showed a negative networth amounting to P65 million. Although the firm has an excess net capital of P3.7 million, without its subordinated loan of P77 million, the net capital deficiency will amount to P73.55 million.
The PSE was also directed to undertake other measures necessary or incidental in carrying out the order.