PSE-COLLEGE.pptx

PSE

1. KNOWING THE PHILIPPINE STOCK EXCHANGE Subtitle

2. What is the Philippine Stock Exchange, Inc.? The  Philippine Stock Exchange, Inc. (PSE or Exchange)   is a private non-profit and non-stock organization created to provide and maintain a fair, efficient, transparent and orderly market for the purchase and sale of securities such as stocks, warrants, bonds, options and others.

3. What is the role of the PSE? The PSE bring together companies which aim to raise capital through the issue of new securities. Through the listing of their share in the stock exchange, companies can have easier access to funds. Raising new capital through an additional public offering is easier and less expensive when the company is already listed in the Exchange. Therefore, the PSE plays a vital role in the financing of productive enterprises that use the funds for growth and expansion of new jobs. It is therefore essential to the growth of the Philippine economy.  

4. Furthermore, the PSE facilitates the selling and buying of the issued stocks and warrants. It provides a suitable market for the trading of securities to individuals and organizations seeking to invest their saving or excess funds through the purchase of securities. Apart from these functions, the PSE has committed itself to ( a)  protecting the interest of the investing public;  and (b)  developing and maintaining an efficient, fair, orderly and transparent market.

5. Efficient        This means that orders are executed and transactions are settled in the fastest possible way. Some reforms have been instituted or are being carried out by the PSE to make the market more efficient, such as: ·          installation of fully automated trading system; ·          installation of computer trading terminals in cities outside Metro Manila to encourage the entry of provincial investors; and creation of a central cleaning and depository system to mobilized stock certificates and allow transfer of shares and funds by book entry.

6. Fair       This means that the PSE assures that no investor will have an undue advantage over another ,market player in trading by manipulating prices and engaging into insider trading. Insider trading is the act of buying or selling a particular stock based on certain privileged information which is not available to the public. As such it is considered as illegal and prohibited by the PSE.

7. Market Transparency       Transparency proceeds from the assumption that the investor can only make informed and intelligent information about the particular sock he wants to buy. The PSE requires listed companies to disclose timely, complete and accurate material information to the Exchange and the public on a regular basis. Such information would include stock price information, corporate conditions and developments which tend to affect stock prices like dividend, mergers and joint ventures, and the like.

8. How did the PSE begin?   The Philippine Stock Exchange began 70 years ago, on August 8, 1927. Five Manila based businessmen, namely W. Eric Little, Gordon W. Mackay, John J. Russell, Frank W. Wakefield and W.P.G. Elliot felt that increasing trading activity would stimulate the business atmosphere. They got together, put their plan into action and founded the  Manila Stock Exchange , the first Stock Exchange in the Philippines and one of the oldest in the Far East. It was originally located in downtown Manila, transferred in1970 to its own three-story building in Binondo, and then moved to Pasig in 1992.

9. On May 27, 1963, the  Makati Stock Exchange  was organized by five other businessmen. These were Hermenegildo B. Reyes, Bernard Gaberman , Eduardo Ortigas, Aristeo Lat and Miguel Campos. It started it operations on November 16, 1965 and was located in Makati, then emerging center for finance.  So, for about thirty years the Philippines had toe stock exchanges, the Manila Stock Exchange (MSE) and the Makita Stock Exchange (MKSE). Although the two exchanges remained as separate entities, they basically were trading the same listed issues. The existence of two stock exchanges in one country caused confusion among (prospective) investors because the two bourses had different policies, different members and, last but not the least, different stock prices for the same listed stocks.

10. The idea to unite the two exchanges and have it managed by a professional group emerged and was attained when the  Philippine Stock Exchange, Inc.  was incorporated on July 14, 1992. To further consolidate logistics and to hasten the development of a more efficient capital market, the leaders of both bourses agreed to unify on December 23, 1993 under the PSE. On March 4, 1994 the Securities and Exchange Commission granted the Philippine Stock Exchange, Inc. its license to operate as a securities exchange in the country stating that “a unified Stock Exchange is vital in developing a strong capital market and a sustainable economic growth.” It simultaneously canceled the licenses of the MSE and the MKSE.   The Philippine Stock Exchange is currently the only organized exchange in the Philippines licensed for trading stocks and warrants.

11. How is the PSE managed? One of the non-broker members heads the Exchange, appointed by the Board as the President and Chief Executive Officer (CEO). The President, along with the professional management of the PSE, executes the policy determinations of the Board and ensures that the Exchange is operating efficiently. It carries out for the members, listed companies and exchange system to ensure that stock market operation in the Philippines is kept within the standards of fairness, transparency, professionalism, trust and integrity. Additionally, it sets the rules and regulations of the Exchange, monitors its implementation and ensures that the investing public is given protection in the transaction of their investments. The Exchange also ensures that all legal requirements under the Corporation Code and the Revised Securities Act are met.

12. How is the PSE organized? The PSE”S organizational structure holds five (5) groups, namely: Listings & Disclosure Group, Compliance & Surveillance Group, Operations/Automated Trading Group, Finance and Investment Group and Business Development & Information Group along with the Office of the General Counsel, Membership Department and Human Resources Management Department, which reports directly to the Office of the President.  

13. The functional responsibilities of each department are as follows: Listings and Disclosure Group                 This group is composed of the following departments: Listing Processing, Legal Advisory and Corporate Disclosure. It processes and evaluates listing applications, conducts legal due diligence, and monitors compliance to continuing listing requirements including disclosure of listed companies. It also coordinates IPO (initial public offering) distribution.

14. Compliance and Surveillance Group        This group acts as the police of the Exchange. It is composed of the Compliance Audit Department, Special Investigation Department, Market Surveillance Department and Legal Section. THe group conducts legal audit and review aside from auditing of member-brokers books and operations. It also monitors the member’s compliance to set rules and regulations and enforces appropriate sanctions to violators or erring member-brokers. It takes responsibility in the operation of the surveillance activity, to ascertain that there are no illegal postings and dealings made in any of the issues listed in the Exchange.

15. Operations/Automated Trading Group                 Placed under this group are the Computer Operations Unit, Systems Development Unit and Systems Integration and technical Support Unit along with the Trading & Settlement Department, Administration Department and PSE Plaza Operations Department to function as one group. It is considered as one of the most critical responsibility areas in the organization since it handles the operation of the automated trading and clearing and settlement activities for stock operations. The Automated Trading Group examines and controls the monitoring, logging and analysis of computer system resource utilization; the maintenance of network connections of all workstations at the trading floor and remote offices; managing of database of off-floor installed sites; and the implementation and integration of the different components of the trading and office systems.  

16. Finance and Investment Group                 The group is responsible for the management of the company’s financial resources. It is composed of the Accounting Department, Treasury Department, Payroll and Budget Section and Investments Monitoring Section which handles the maintenance of book of accounts, preparation of financial statements and budget, management and placement of PSE funds, monitoring of accounts receivables and billing of accounts.  

17. Business Development and Information Group       This group is comprised of the following: Product Development Department, Market Development Department, Research and Public Information Department, Corporate communications Department, PSE Training Institute and PSE Rule Book/Task Force Quality Unit. The Product Development Department is in charge of the expansion, development and packaging of domestic and foreign financial products, equity-related securities, debt-related securities and other forms of securities and derivatives. It coordinates with private businesses, government agencies and associations in the overall development and packaging of the securities, derivatives and trading facilities.

18. The Market Development Department handles the expansion, development and monitoring of the investor base for both domestic and foreign market on an individual and institutional level. It looks at the PSE trading operation’s presence and positioning in the domestic, regional, and international markets including the expansion and development of market intermediation services and facilities covering secondary, over-the-counter (OTC) and third markets. The Research and Public Information Department is composed of the Research Services Sections, Information and Publications Section and the Public Information and Assistance Center (PIAC). It conceptualizes, processes, consolidates and handles multi-media dissemination of statistical and analytical information and studies related to the business requirements of members. It conducts research and provides information support to the expansion and development of the Exchange trading operations and its markets. It also maintains, develops and disseminates information through manual or electronic libraries and documentation. The department produces regular publications – Weekly Report, Monthly Reports, and Fact Book – that provide market users with a review of the market’s performance along with historical and current data on stock trading activities and listed companies. The Department also acts as the liaison of the Exchange through the sharing of data and information with foreign individuals, organizations and institutions.

19. T he Corporate Communications Department manages all forms of media and public relation through press releases, information and educational campaigns. It is in charge of managing and developing business promotional and marketing exposure requirements of the PSE including the production and dissemination of corporate internal bulletin and other forms of information materials. The PSE Training Institute is responsible for the development of programs/curricula along with providing lectures, trainings and seminars about securities market participants. Aside from in-house seminars, it conducts road shows to investors in the provinces. The Institute also provides logistics support to all training-related activities of the departments in the PSE. In the future, the Institute plans to conduct activities such as the Certified Securities Representative (CSR) seminars and the technical and fundamental analysis seminars in the coordination with other intuitions.  

20. The PSE Rule Book/Task Force Quality is responsible for the codification and the manualization of the PSE’s rules, guidelines, procedures and other legislative materials coming from government agencies, into a consolidated and comprehensive Manual of Rules of the Exchange. The PSE Rule Book consists of five (5) volumes which are: (1) Corporate Rules, (2) Membership Rules, (3) Listing and Disclosure Rules, (4) Trading and Settlement Rules, and (5) Compliance and Surveillance Rules.  

21. Membership Department     This department manages, implements and coordinates members’ requirements, planned activities and projects with the end in view of assisting PSE management in the expansion, consolidation and development of its membership. It also processes membership applications and various corporate changes of member-brokers for approval by the Membership Committee. It is in charge of circular preparations concerning membership, and the monitoring of financial statements of brokers and SEC licenses of its stock traders. In coordination with the Membership Committee, it facilitates memberships arbitration. Further, the Membership Department organizes and prepares social activities for all members.  

22. Human Resources Management Department       This department, under the Office of the President, handles employee career management, administration of employee compensation and benefits, management of corporate culture and organization development, implementation of the company’s performance management system and formulation and enforcement of company policies. To ensure continuing organization and employee development, this department integrates the organizational structure/processes and workforce issues into the business equation and evaluates group processes and dynamics to tailor-fit results with a corporate staff training and management development program.  

23. Office of the General Counsel           The Office of the General Counsel renders corporate legal services and serves as the primary legal advisor to the Board of Governors, the President, the Chief Operating Officer, the various departments, officers and employees of the Exchange. It also coordinates with the external legal consultants on matters referred by the exchange; represents the Exchange before judicial and administrative/quasi-judicial bodies; and, attend legislative and administrative hearings or meeting as well as draft position papers and/or comments to pending legislation and administrative issuances .  

24.   Where is the PSE located? The PSE has two trading centers located at the PSE Centre in Ortigas, Pasig – where its executive officers are situated – and at the PSE Plaza in Makati City.

25. Group Corporate structure

26. Capital Markets Integrity Corporation CMIC was established for the primary purpose of reinforcing the confidence of the investing public in capital market institutions and promoting a more active and vibrant market participation. Accordingly, CMIC acts as the independent audit, surveillance and compliance arm of the Exchange . As a self-regulatory organization, CMIC’s primary mandate is to maintain the integrity of the market and minimize the risk of the investing public by ensuring that the TPs adhere to all pertinent rules, regulations, and code of conduct of CMIC and the Exchange, as well as all related legislative and regulatory requirements. Tasked with regulating and monitoring the activities of market participants, CMIC enforces rules, guidelines, and provisions of the Securities Regulation Code, or the SRC, and other securities laws, applicable to the operations and dealings of the TPs of – including, in particular cases, Issuers whose securities are listed in – the Exchange. Verily, under the CMIC Rules, which took effect in March 2012, CMIC, among other matters, enforces compliance by TPs – and, in the proper cases, by Issuers – with the securities laws.

27. Securities Clearing Corporation of the Philippines The Securities Clearing Corporation of the Philippines (SCCP) is a wholly-owned subsidiary of The Philippine Stock Exchange, Inc. (PSE) and is under the regulatory supervision of the Securities and Exchange Commission (SEC). It was incorporated on January 23, 1996 to operate as a central securities clearing institution in the Philippines and thereby manage and support the clearance of trades in securities listed and executed on the PSE or other official securities market in the Philippines. It acts as a Central Counterparty to trades executed at the PSE. SCCP started its commercial operations on January 3, 2000 and was granted its permanent license to operate on January 17, 2002. SCCP is authorized by the SEC to impose fines and penalties and other sanctions as approved by the SCCP Board of Directors to ensure compliance of its Clearing Members.

28. Premier Software Enterprise, Incorporated Ten years ago, we had a vision to revolutionize the financial services specifically the stock market to every Juans to have access to investing through stocks by creating a system that is at par with foreign-provided system but relevant to local target audience. We develop our software with an anti-thesis mindset and and challenging the status quo. Fast forward to April 2019 as we slowly achieving the vision, we became a PSE IT subsidiary to fast track that vision, help other industries and companies to be competitive in this fast-changing world.

29. Philippine Dealing System Holdings Corporation The PDS Group was built as a community solution following the economic stresses felt in the region in 1997. The Group was formed to shepherd the implementation of a Market Reform – the organized market. Powered by state-of-the-art technology, PDS provides a full suite of services, from trading to clearing and settlement, and post settlement across different asset classes. It also offers learning facilities to equip its markets and communities in keeping pace with market development and professional practice, here and abroad.

30.  What are the business hours of the PSE? Except Saturdays, Sundays, legal holidays and days when the Bangko Sentral ng Pilipinas (BSP) Clearing Office is closed, trading hours in the Philippine Stock Exchange shall be in one continuous session with the following daily schedule:    Playing of the National Anthem   8:45 a.m.     Pre-open Period     9:00 a.m. ~   9:30 a.m.     Calculation of Open Price/Market Open  9:30 a.m.     Regular Trading Period   9:30 a.m. ~ 12:00 noon     Closing Time    12:00 noon  A ten (10) minute extension from closing time shall be allowed to execute orders at closing prices.  

31. PROHIBITIONS AND FRAUD, MANIPULATION AND INSIDER TRADING (CHAPTER VII): SECURITIES REGULATION CODE

32. PROHIBITIONS AND FRAUD, MANIPULATION AND INSIDER TRADING (CHAPTER VII): SECURITIES REGULATION CODE Section 27.  Insider’s Duty to Disclose When Trading . – 27.1. It shall be unlawful for an insider to sell or buy a security of the issuer, while in possession of material information with respect to the issuer or the security that is not generally available to the public, unless: (a) The insider proves that the information was not gained from such relationship; or (b) If the other party selling to or buying from the insider (or his agent) is identified, the insider proves: (I) that he disclosed the information to the other party, or (ii) that he had reason to believe that the other party otherwise is also in possession of the information. A purchase or sale of a security of the issuer made by an insider defined in Subsection 3.8, or such insider’s spouse or relatives by affinity or consanguinity within the second degree, legitimate or common-law, shall be presumed to have been effected while in possession of material non-public information if transacted after such information came into existence but prior to dissemination of such information to the public and the lapse of a reasonable time for market to absorb such information:  Provided, however , That this presumption shall be rebutted upon a showing by the purchaser or seller that he was aware of the material non-public information at the time of the purchase or sale.