SEC requires broker-dealers to build own websites

To strengthen investor protection, the Securities and Exchange Commission ( SEC), had set a new requirement to brokerage firms, obliging them to build their own websites to improve their accessibility to the public.

According to SEC, the websites shall contain basic information about the brokerage firms such as the services offered, the names, current photos and contact details of its directors, principal officers, associated persons and salesmen.

The corporate regulatory watchdog said while this requirement is included in the 2015 Implementing Rules and Regulations of the Securities Regulation Code (SRC IRR), this is also “intended to enhance investor protection”.

“This new requirement allows prospective investors to easily verify the identity and authority of the person acting as salesman in representation of a particular Broker Dealer,” the Commission said.

“By simply looking at the name and photo posted on the website, the investor is assured that the person he is dealing with is authorized to do so,” it added.

SEC also noted that this website requirement will likewise deter the recurrence of investment scams wherein unlicensed persons appeared to have enticed investors to invest in securities and who represented to be connected to registered Broker Dealers.

The SEC, in its meeting later this week, resolved to grant Broker Dealers an extension of until 30 May 2016 to com- ply with the website requirement.

“The SEC has vowed to fully enforce the 2015 SRC IRR following the lapse of the effectivity of the temporary restraining order issued by the Regional Trial Court of Mandaluyong City,” it further said.

It was in November when the SEC launched the amended IRR of the SRC.

The amended IRR of SRC, which is formally identified as the 2015 SRC Rule, enhances existing requirements that consider companies’ capability to raise funds in the domestic market; addresses regulatory gaps’ strengthens market and regulatory structures; and adopts global best practices.

Four years in the making, the 2015 SRC Rule was completed and finalized in August last year.