Securities and Exchange Commission (SEC) chairman Francisco Lim said a proposal to impose term limits on broker directors of exchanges is non-negotiable, despite threats of legal action from industry participants.
The proposed rules, currently under an exposure draft, would apply to broker directors at institutions including the Philippine Stock Exchange.
Lim dismissed concerns that the measure infringes on shareholder rights, noting that investors remain free to vote for new brokers once a director’s term expires.
“As far as I’m concerned, term limits are non-negotiable. But I’m willing to listen to the market,” Lim told reporters on the sidelines of a recent forum, adding that the draft does not violate any existing laws.
Under the SEC draft rules, broker directors would be elected for 1-year terms but capped at a maximum cumulative period of 10 years, whether consecutive or intermittent.
Any broker director who has served a total of five years should observe a two-year cooling-off period before seeking the position again.
The 15-man Philippine Stock Exchange board consists of a president-director, five broker-directors and nine non-broker directors. Current Philippine Stock Exchange broker-directors include Diosdado Arroyo, Eddie Gobing, Anthony Te, Wilson Sy and Ma. Vivian Yuchengco.
Yuchengo of Philippine Association of Securities Brokers and Dealers Inc. (PASBDI) said the group is strongly against the proposal and intends to seek legal action.
The Shareholders’ Association of the Philippines (SharePHIL) has backed the SEC, arguing the measure strengthens corporate governance and protects minority investors.
SharePHIL representatives said a 10-year cumulative limit would prevent board entrenchment and introduce new perspectives to exchange leadership, aligning the Philippines with global governance standards.
Five other business groups expressed support for the proposal last week, citing a need to bolster investor confidence and improve market oversight.
