SEC asks PSE to explain technical glitches

The country’s corporate regulatory watchdog has given the Philippine Stock Exchange (PSE) until today (Friday) to fully explain the technical glitches that had occurred during stock market trading, particularly last August 25 when trading was halted for five hours making it the longest halt in the history of the local bourse.

Technical glitch had knocked down Philippine stock market trading for nearly five hours on Tuesday, infuriating investors who wanted to rush back to the market and take advantage of the global recovery that came after Monday’s crash.

Sought for comments, Securities and Exchange Commission (SEC) chairperson Teresita Herbosa said the PSE only has until today to explain the glitches, especially the one that occurred during the August 25 trade.

"We have ordered PSE to submit not later than Friday, August 28, 2015, a full and thorough report on these glitches and trading halts. In addition, we have directed the PSE Trading Participants to submit their RBCA [Risk-Based Capital Adequacy] reports computed as of August 24, 2015, and from there, the SEC will review their RBCA compliance,” Herbosa said.

RBCA requirements pertain to the minimum required liquid reserves to protect the firms, their investors, customers and the economy as a whole. It ensures that the broker dealers have enough capital to sustain operating losses while maintaining a safe and efficient market.

Under the SEC RBCA Rules, broker dealers are required to compute daily their RBCA ratio and financial requirements and to submit monthly an RBCA report showing their compliance/non-compliance with the RBCA ratio and other financial requirements.

SEC, however, may require broker dealers to submit RBCA report at any given time, in addition to the monthly RBCA report.

“The SEC will provide update after its review of what happened taking into account the full report of PSE,” the Commission further said.

SEC is now closely monitoring the development in the stock market including the glitches that happened on August 18, 24 and 25, 2015, which resulted in three occasions of market trading halts.

Trading on Tuesday was halted from 10:02 am on Tuesday until 2:55 in the afternoon. It was the third time this month that the trading was halted. Trading was also halted the previous day Monday when the market was currently on a slide due to global woes mainly brought about by China economic slowdown.