Stock broker to take smaller commissions from trade
Stock brokerage house Luna Securities Inc. is offering a lower-than-average commission rate to clients to spur trading.
Luna chair and cofounder John Gatmaytan told reporters on Friday their commission rate of 0.12 percent of the value of a trade transaction was lower than the industry average of 0.25 percent.
If an investor buys 100 shares at P100 apiece, this values the transaction at P10,000. Luna, as the broker that buys and sells stocks for their clients, will earn a commission of P12.
Asked how they would earn back their investments, Gatmaytan explained they had relatively lower costs, since their entire trading process was automated.
“Luna runs on the latest technology available, with a cloud-based, full digital user interface, plus an end-to-end system designed in-house by our fintech (financial technology) team,” he said.
An investor holding a stock certificate wishing to trade the shares needs to go to a broker that will check the authenticity of the ownership and documentation. Brokers then endorse the shares to a transfer agent. Some steps in this process, such as authentication, are manually done.
Luna, which started live trading operations in March 2022, also claims to be among the first brokers to implement lower commission fees since the Securities and Exchange Commission (SEC) removed the required minimum charge paid by investors.
Brokers previously charged a minimum 1.5-percent commission under a 1977 resolution of the SEC.
The Philippine Stock Exchange, meanwhile, prescribed a minimum commission ranging from 0.25 percent to 0.05 percent of the trade transaction.
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