The local bourse wants to penalize stockbrokers that will purchase shares of the Philippine Stock Exchange for their own account to skirt the rule on the 20-percent ownership restriction.
The PSE said it wanted the penalty imposed to ensure compliance with the 20-percent ownership requirement limit under the Securities Regulation Code.
The purchase of PSE shares, according to the proposed amendments to the PSE rules governing trading rights and trading participants, will be considered a major violation and result in the imposition of penalties.
For the first offense, the PSE said trading participants acquiring PSE shares would be slapped with a P100,000 fine and a P200,000 penalty for the second offense.
For third and subsequence offense, the PSE would slap trading participants with a P300,000 fine and the suspension of trading operations for five consecutive trading days.
The trading participants, in addition, would be ordered to immediately dispose of the equivalent number of PSE shares bought in violation of the ownership rules and fully indemnify the PSE for any penalty that might be imposed by the Securities and Exchange Commission against the exchange for violating the ownership limitation.
The PSE said concerned parties would entitled to give their comments on the proposed amendments on or before Dec. 3.
Under the SRC, no single industry or group should own over 20 percent of an exchange. Brokers’ ownership in the local bourse currently stands at 21.7 percent even after the PSE conducted a rights offering last year.
The SEC currently prohibits brokers from buying PSE shares for their own account until such time that the exchange is in compliance with the 20-percent ownership requirement.
The SEC has been pushing the PSE to reduce the brokers’ ownership in the local bourse to comply with the 20-percent limit.
The PSE earlier said it would revoke the trading rights of inactive trading participants with no plans to resume brokerage operations. The move will help the PSE meet the ownership requirement.
The PSE said it had written 52 inactive brokers to ask them if they were still interested in operating as a brokerage company.
Only 14 out of the 54 inactive brokers own shares in the PSE
Share price of PSE last week closed at P173.