Question & AnswerQ&A (SEC FICIAL AND OPERATIONAL RULES)
Every applicant for registration as a broker or dealer in securities must have a minimum net capital of P10,000,000.00 as required by SEC Rule 19-1.
The application must be filed in two copies and accompanied by a continuing authorization for commission representatives to verify bank accounts, surety bond (P5,000,000.00 for brokers or P1,000,000.00 for dealers) with required clearances, valid work permits for foreigners connected to the applicant, corporate certifications and resolutions if a corporation, and the latest audited financial statement.
Only a natural person employed by a registered broker or dealer can be registered as a salesman. The salesman’s registration is tied to their employment with the broker or dealer.
The filing fee for registering a salesman is P1,000.
If the fee is not paid or the renewal form is not filed by December 1, registration is suspended until payment is made. If payment is not made within 30 days after the deadline, the registration is terminated.
No, a broker or dealer cannot lend a customer's securities to itself or anyone else or vote them as if they were its own without the customer's written consent.
It requires brokers or dealers to maintain physical possession or control of all fully paid securities and excess margin securities carried for customers on a daily basis, except for temporary lags due to normal business operations where good faith efforts are made to obtain possession.
The Reserve Bank Account is a special segregated bank account maintained exclusively for customers’ funds by the broker or dealer to ensure customer protection. It must be maintained per computed reserve requirements based on customer credits and debits.
The broker or dealer must immediately notify the Securities and Exchange Commission and the Philippine Stock Exchange by fax, telegram or similar means and confirm in writing the reasons for failure. Continued failure can lead to regulatory sanctions.
Purchases by a customer in a cash account must be paid in full within three business days after the trade date.
The broker or dealer must cancel or liquidate the transaction or the unsettled portion starting the next business day but not beyond ten business days after the payment deadline unless justifiable reasons prevent the sale.
They are prohibited from guaranteeing customers against loss in securities accounts or transactions.
They must file the reports annually with the Securities and Exchange Commission and the Philippine Stock Exchange by 105 days after the close of their fiscal year, which is by default December 31.
Brokers and dealers must physically examine all securities held, verify records of securities in transfer or control, account for securities status older than 30 days, reconcile counts with records, and record unresolved differences within seven business days.
A customer is any person from whom a broker or dealer has received or holds funds or securities, excluding brokers or dealers themselves and principals whose claims are part of the capital or subordinated. However, brokers or dealers are considered customers to the extent of omnibus accounts maintained for clients.