SEC eyes trading boost

INVESTORS can now negotiate for even lower stockbroker charges as the Securities and Exchange Commission (SEC) has removed the minimum commission fee in a bid to boost capital market activity.

Under SEC Memorandum Circular 7, Series of 2024, issued on Tuesday but only made available a day later, brokers may now set their own commission schedule for transactions with their clients.

The corporate regulator had previously set the broker’s commission at 1.5 percent, while guidelines by the Philippine Stock Exchange imposed a minimum commission ranging from 0.25 percent to 0.05 percent of a transaction’s value.

“Lower transaction costs are vital in encouraging the public to invest their money in the stock market,” SEC Chairman Emilio Aquino said in a statement, noting that the new rule could help bring out more retail investors.

“The SEC will continue to review existing rules and regulations to see areas where we can make improvements to achieve our goal of boosting the capital market,” he added.

The move came after the commission saw an increase in online trading platforms, which were said to have offered options for more cost-efficient deals. It also took cues from neighboring jurisdictions that do not prescribe a minimum broker’s fee.

“The SEC is banking on the removal of the minimum commission to help spur trading in the stock market . ... The new rule likewise seeks to empower the investing public to engage the services of a broker of their choice based on cost preference,” the regulator said.

Last year, the corporate watchdog greenlit a shorter settlement cycle, enabling investors to gain trading proceeds within two days instead of three while also reducing risk exposure for trading participants.