The Securities and Exchange Commission said Thursday it penalized six brokerage companies for failing to comply with the new requirements under the 2015 implementing rules and regulations of the Securities Regulation Code.
The corporate regulator identified the brokers as Equitiworld Securities Inc., First Orient Securities Inc., IGC Securities Inc., Regina Capital Resources Management and Securities Corp., SJ Roxas & Co. Inc. and The First Resources Management and Securities Corp.
SEC said the penalties ranged from P30,000 to P60,000, with a stern warning that heavier sanctions would be imposed on them if they continued to violate the regulatory requirements.
SEC said the brokers, all trading participants in the Philippine Stock Exchange, were issued notices regarding the penalties by SEC’s markets and securities regulation department.
SEC said the brokers failed to submit new requirements prescribed under 2015 SRC-IRR such as risk management and internal control procedures, business continuity and disaster recovery plan, comprehensive information technology plan, updated written supervision and control procedures and copies of proposed contract of outsourced activities or services.
It said the new requirements were designed to improve market structures, enhance investor protection and strengthen the anti-money laundering framework. These are based on global practices and standards as being done in leading markets, it said.
The 2015 SRC-IRR took effect on Nov. 9, 2015. SEC also extended the deadline for brokers to comply with the new requirements.
SEC vowed to fully enforce the new rules following the lapse on March 10, 2016 of the 20-day temporary restraining order issued by the court against some provisions of the 2015 SRC-IRR.
Sanction letters are also being prepared for market participants who are not compliant with the new rules, it said.
The Philippine Association of Brokers and Dealers Inc., an association of stockbrokers and dealers, earlier sought to invalidate some of the provisions of the 2015 SRC-IRR.
PASBDI questioned the requirement that brokers and dealers should provide SEC with a comprehensive information technology plan, business continuity, disaster recovery plan, risk management manual and internal control procedures as a pre-requisite for registration.
SEC said these requirements sought to ensure the competence of brokers and dealers to promote and protect the investments of their customers.
The group also questioned the amendments requiring disclosure of beneficial owners of shares of stocks, a requirement necessary to further efforts against money laundering and to comply with Supreme Court directive in Gamboa v. Teves requiring SEC to look into the beneficial ownership of corporations and ensure compliance with the limit on foreign ownership.