SEC reports 66% compliance with 2015 Securities Regulation Code’s IRR

The Securities and Exchange Commission ( SEC) reported 66- percent compliance with the newly implemented rules and regulations of Securities Regulation Code (SRC) despite being criticized by some brokers for being too difficult to comply with.

Based on its latest data, SEC said that as of February 16, 2016, 88 of the 133 broker dealers and trading participants of the Philippine Stock Exchange (PSE) have already submitted the new requirements under the 2015 Implementing Rules and Regulations of the Securities Regulation Code which took effect on November 09, 2015.

Under Rule 28.1.7 of the 2015 SRC IRR, any registered Broker Dealer must comply with all the requirements provided the rules within 90 calendar days after its effectivity.

The subject rule requires the submission of Detailed Description of Organizational and Functional Charts, the names and designations of the officers, including branch offices; Risk Management Manual and Internal Control Procedures; Business Continuity and Disaster Recovery Plan; Comprehensive Information Technology Plan.

The Comprehensive Information Technology Plans requires certain items such as the list and brief description of the software and hardware to be primarily used in its functions and their location; back-up system or subsystem and their location; security system and procedures to be employed; procedures to check sufficiency of system’s capacity and expansion program, if necessary; and IT system maintenance schedule.

It was at the start of the month when the government has favored the corporate regulatory watchdog as it caught itself in a dispute against a brokerage firm that wants some provisions in the newly implemented rules of the SRC be removed.

In its petition, brokerage firm Philippine Association of Brokers and Dealers Inc. (PASBDI) sought to invalidate some provisions of the 2015 SRC Implemented Rules and Regulation (IRR) that would require brokerage firms in the country to be more transparent.

But the Regional Trial Court (RTC) of Mandaluyong City denied that petition because it “miserably lacked any basis”.

PASBDI particularly doesn’t want brokers and dealers to provide the 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.

PASBDI also questioned the amendments requiring disclosure of beneficial owners of shares of stocks.