SEC urged to defer commission order
STOCKBROKERS have appealed to the Securities and Exchange Commission (SEC) to defer the removal of minimum commission fees on stock trades — at least until the stock transaction tax has been reduced — to ensure the welfare of both brokers and investors amid “challenging market conditions.”
The Philippine Association of Securities Brokers and
Dealers Inc. ( PASBDI) said the reduction of commission fees and a bill proposing lower stock transaction tax from the current 0.6 percent to 0.1 percent must be simultaneously implemented to spur trading activity.
“We t hi nk t ha t t he reduction of the broker commission charge is not sufficient to materially i mprove t he volume of transactions in the market, but when done together with the reduction of sales tax, could be a more meaningful reform that will be appreciated by a wider investor base,” the group said in an April 18 letter to SEC Chair Emilio Aquino, Philippine Stock Exchange ( PSE) president Ramon Monzon, Finance Secretary Ralph Recto and Investment and Economic Affairs czar
Frederick Go.
PASBDI, a 50- year- old organization that aims to develop the local securities market, has 122 PSE trading participants as its members.
Lawmakers are pushing for a reduction i n stock transaction tax to 0.1 percent through House Bill No. 9277. The House of Representatives approved the bill, which was authored by Ways and Means
Committee chair Joey Salceda, on third and final reading last month.
Improving transactions PASBDI’s l etter came after the SEC had issued a memorandum c i r c ul a r allowing brokers to set their own commission schedule f or t r a nsactions with investors, removing decadesold minimum fees that the corporate watchdog earlier required.
Under a 1977 resolution of the SEC, brokers previously c h a r g e d a m i n i m u m commission of 1.5 percent of the value of a trade transaction. Meanwhile, guidelines issued by the PSE prescribed a minimum commission ranging from 0.25 percent to 0.05 percent of the value of a trade transaction.