Jose P. Aquino, head of the SEC’s Markets Regulation Department, said PASBDI needs to explain why the existing paid-up capital requirement of P100 million should be lowered to P40 million.
"We have already received their request. Problem is, they lack the figures to support their request. What is their basis for coming up with the P40-million level? We are just waiting for them to submit their computations to us then we will decide on the issue," Aquino said.
Aquino, however, said this matter would be reviewed carefully by his staff. "There are a lot of things to consider here, like the existing market conditions which have been favorable," he said.
Brokerage firms that suspended trading operations since 2000 have signified their interest to re-enter the equities market on improving macroeconomic indicators. They include foreign brokerage house JP Morgan, Mark Securities and Highlands Securities.
To allow it to revive its trading operations, Mark Securities of the Dayrit family is seeking the reduction of the SEC’s paid-up capital requirement. The company voluntarily suspended operations in September 2002 due to poor market conditions.
Under the rules, new entrants and those that are planning to return to the brokerage business must have a minimum paid-up capital of P100 million while existing brokers a paid-up capital of at least P50 million.
Records from the Philippine Stock Exchange showed that there are currently 132 active brokers.
According to the PASBDI, the umbrella organization of securities brokers and dealers, the existing P100 million paid-up capital is too high and anti-Filipino since only foreign brokers and big Filipino-owned broker firms can comply with this requirement.
Listed mong the inactive broker firms in the PSE’s website include EBC Securities, Citicorp Securities International and KGI Securities Phils.
Some of these broker firms plan to reactivate their seats to allow them to sell to other interested investors now that the market is gaining strength on an improving economic environment.
Trading value in the PSE jumped 162 percent for the first five months of the year to P196.5 billion from P74.9 billion the previous period. The figure already accounts for 95 percent of the full year 2004 level of P206.6 billion.