Philippine Dealing Exchange - Governance

Governance

In July 2006, the Philippine Dealing & Exchange Corp. (PDEx) was granted registration as a Self-Regulatory Organization (SRO) by the Securities & Exchange Commission (SEC) for the Inter-Dealer Market. In November 2007, the SEC expanded the SRO registration of PDEx to cover the Inter-Professional Market.

Under the Securities Regulation Code (Republic Act No. 8799), an SRO is registered as such under the SRC to enforce compliance with provisions of the Code and its rules and regulations, and mandated to make and enforce its own rules. It should enforce fair, ethical and efficient practices in the securities industry.

With this mandate, PDEx has created a comprehensive governance structure that is designed to separate the market governance function of PDEx from its corporate governance structure that sees to the business needs of PDEx as a commercial enterprise.

The Market Governance Board (MGB) is a separate and independent body that is created for the primary purpose of crafting regulation and the Market Compliance and Discipline Committee (MCDC) for the purpose of seeing to the proper observance of market rules and laws.

The MGB is composed of 9 governors, 4 governors representing market interests, the issuers, the dealers, the salesmen, and the investors, 4 governors that are independent and a representative of PDEx as market operator. The membership was designed to achieve a balance of market interests and independence, to ensure that rule measures are not only in accord with market practice and consistent with market interest but also are aligned with the relevant regulatory principles in applicable global practice and standards and the responsibilities of PDEx as an SRO.

The envisioned market structure hopes to establish an SRO that is both a partner with the industry and an enforcer of market rules to participants that have agreed to be bound thereby.