Business groups back term limits for PSE directors
Key business groups have thrown their support behind the proposed imposition of term limits on broker directors of securities exchanges, saying this could strengthen governance and investor confidence.
In a joint statement Thursday, several business groups endorsed the draft memorandum circular of the Securities and Exchange Commission.
These include the Institute of Corporate Directors, Financial Executives Institute of the Philippines, Management Association of the Philippines, Capital Markets Development Foundation Inc. and Investment House Association of the Philippines.
The SEC wants to introduce tenure limits for broker directors, a step the groups described as “constructive” in promoting board independence, reducing potential conflicts of interest and improving the credibility of the country’s securities exchange system.
They emphasized that securities exchanges are not ordinary corporations but function as self-regulatory organizations under the Securities Regulation Code.
As such, exchanges are tasked with monitoring trading, supervising brokers, enforcing rules and preventing market manipulation—roles that make their governance a matter of public interest.
Given these responsibilities, the groups said the SEC has broad authority to regulate exchange governance structures. The mandate includes implementing measures to address risks of undue influence, regulatory capture and conflicts of interest.
They added that term limits would not restrict shareholder rights, but instead encourage more active participation by ensuring that stockholders periodically elect qualified brokers to the board.
The term limits, they said, could bring fresh perspectives.
