New PSE president to focus on PDS merger, lowering broker ownership

MANILA, Philippines – Ramon Monzon, the new president of the Philippine Stock Exchange (PSE), will focus on complying with the rules of the Securities and Exchange Commission (SEC) and finally merging the stock exchange with the bond market.

The PSE announced that the 67-year-old Monzon, founder of the global beauty pageant Miss Earth, replaced Hans Sicat as president at its annual stockholders’ meeting held last Saturday, May 6.

Sicat will now head the PSE’s integration team with the Philippine Dealing System Holdings Corporation (PDS).

Monzon said the PSE will work on getting regulators’ approval for the planned acquisition of PDS, the owner and operator of the country’s fixed income exchange or bond market, by July.

“The biggest challenge we are facing right now is getting regulatory approval for the purchase,” the new PSE president said following the stockholders’ meeting.

The SEC had rejected the PSE’s initial application to acquire PDS in March 2016, saying that the planned merger was not in the public interest.

Monzon also said the PSE recently submitted documents regarding the acquisition to the Philippine Competition Commission (PCC).

Lowering broker ownership

The new PSE president will also focus on lowering broker ownership in the PSE to the 20% required by the SEC.

Brokers currently own 27.9% interest in the PSE, and the SEC has given the local bourse one year to comply.

The SEC has been imposing penalties against the PSE for failure to comply with the single industry ownership limit since July 2007. At the time, brokers held 40% ownership in the exchange.

As an initial move, Monzon said the PSE has asked the SEC to remove the shares held by inactive brokers from its broker ownership computation. If removed, broker ownership will drop further by 3.4% to 24.5%.

At the same time, the PSE has also asked the SEC to remove the prohibition barring brokers from buying PSE shares.

“We noticed there has not been too much trading of the PSE stock because of the current prohibition, so the price of the PSE stock is not really market-determined,” Monzon explained.

“So we asked the SEC if they could relax the rules prohibiting brokers from buying PSE stocks so that normal trades can happen. This may also convince other brokers to sell because maybe they are not excited to sell their PSE shares since the current market price is low,” he added.

Monzon is an accountant who worked as a partner at SGV & Company. He is also chairman and president of Carousel Productions Incorporated, which owns and runs the Miss Earth beauty pageant.

He has been an independent director of the PSE since May 2015 and served as head of the PSE audit committee. – Rappler.com