The Philippine Stock Exchange Inc. (PSE) is increasing the minimum unimpaired paid-up capital stock requirement for the bourse’s trading participants, or the brokers.
‘To ensure systemic stability and index against inflation, the exchange proposes a phased increase in the unimpaired paid-up capital requirement,’ the PSE said in its consultation paper.
The PSE said it wants to see trading unimpaired paid-up capital requirement raised to at least P50 million by end-December 2027.
By December 31, 2028, trading participants not meeting the P100-million minimum unimpaired paid-up capital requirement will be required to increase their surety bond to P20 million from the current P12 million. By December 31, 2029, the unimpaired paid-up capital should be at least P10 million.
Since the minimum unimpaired paid-up capital for broker-dealers was last adjusted in 2010, the market has seen a substantial growth in transaction sizes, volumes, inflation and systemic risks.
Under the 2009 PSE Rules Governing Trading Rights and Trading Participants, an entity applying to be a trading participant, which will not be able to meet the P100-million unimpaired paid-up capital requirement, should have a minimum unimpaired paid-up capital of P20 Million. This was increased to P30 million effective December 31, 2010.
In addition, the 2015 implementing rules and regulations of the Securities Regulation Code requires existing broker-dealers allowed to defer compliance with the P100-million unimpaired paid-up capital requirement to file a surety bond of not less than P10 million for brokers and not less than P2 million for dealers.