Philippine Stock Exchange

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The Philippine Stock Exchange, Inc.
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Headquarters Pasig City, Phillipines
Products Securities Trading
Website www.pse.com.ph/


The Philippine Stock Exchange, Inc. (PSE) is a private organization that provides a market for the buying and selling of securities.

PSE currently maintains two trading floors, one in Makati City and another in its head office in Pasig City. Despite having two floors, PSE maintains a "one-price, one-market" exchange through its MakTrade System, a single-order-book system that tallies all orders into one computer and ensures that these orders match with the best bid/best offer regardless of which floor the orders were placed.

MakTrade also enables PSE to facilitate the trading of securities in a broker-to-broker market through automatic order and trade routing and confirmation. It also keeps an eye on any irregularity in the transactions with its market regulation and surveillance databases.

The Philippine Central Depository, established in March 1995, provides the securities settlement system for both debt and equity instruments of the exchange with a computerized book-entry-settlement system.

The Securities Clearing Corporation of the Philippines ("SCCP") is the clearing and settlement agency for depository eligible trades in the exchange.


History

The PSE traces its roots from the country's two former bourses: the Manila Stock Exchange ("MSE") and the Makati Stock Exchange ("MkSE"). Founded in March 1927, the MSE was the first stock exchange in the Philippines and one of the oldest in Asia. It was originally located in downtown Manila, but moved to Pasig City in 1992. The MkSE was established in May 1963 and became the second bourse to operate in the country. It was based in Makati City, a budding business district at the time.[1]

The two exchanges traded the same listed issues but remained separate entities for almost 30 years. They were unified to become the PSE on Dec. 23, 1992.

In June 1998, the Securities and Exchange Commission conferred to the PSE the status of a self-regulatory organization, thus allowing the PSE to implement its own rules and impose penalties on erring trading participants and listed companies.

In 2001, the PSE was reorganized and transformed from a member-governed organization into a shareholder-based, revenue-generating corporation. The exchange separated its ownership and trading rights, opening the door for new market participants. On Dec. 15, 2003, PSE shares were listed by way of introduction.

In late July 2010, the exchange replaced the MakTrade system it had been using since 1993 with the New Trading System or NTS. It uses the trading software product developed by NYSE Technologies SAS, the commercial technology unit of NYSE Euronext, which in turn operates the largest exchanges around the world including the New York Stock Exchange and Euronext. The new application is designed to trade a wide range of cash, debt and derivative instruments not possible through the previous trading system. The new system is also expected to improve the capacity of the bourse to handle any future sharp increase in its turnover.[2]

On July 26, 2010, the exchange's launch of the NTS quickly devolved in market disarray due to a data glitch for the benchmark index: it erroneously showed a 14 percent gain on the day; the actual close was down 0.1 percent. Trading was not suspended, which did draw complaints from investors. The problem was not resolved until more than three hours after trading had closed.[3]

An exchange statement advised traders to disregard a glitch in the index values and market statistics impacting market data feed, the electronic board and the PSE website while they looked into the problem.[4]

In 2015, the PSE shifted to a new trading system, the PSEtrade XTS, which uses NASDAQ's X-stream Technology trading system. [5]

The exchange sought regulatory approval to formalize the use of short selling in 2014 and announced in September 2018 that short selling would be available during the third quarter of that year. It will be restricted to exchange-traded funds and the 30 stocks listed on the main PSE index (PSEi), with the permitted trading ceiling set at 10 per cent of the outstanding shares of any eligible security.[6]

Short selling was previously used only on rare occasions in the Philippines by brokers as a way of dealing with failed trades and intraday defaults.[7]

Key People

  • Ramon S. Monzon, President & Chief Executive Officer
  • Roel A. Refran, Senior Vice President and COO
  • Rachelle C. Blanch, Vice President & Head, Market Operations Division[8]

References

  1. Demutualization of the Philippine Stock Exchange. ADB.org.
  2. New system throws Philippine bourse into disarray. Asssociated Press.
  3. New system throws Philippine bourse into disarray. Asssociated Press.
  4. Press Release. Philippine Stock Exchange.
  5. Philippine Stock Exchange Selects NASDAQ OMX's X-stream Trading Technology. Wall Street Journal.
  6. Philippine Stock Exchange to Introduce Short Selling. The Borneo Post.
  7. Philippine exchange prepares for trading upgrade. The Financial Times.
  8. Management Officers. The Philippine Stock Exchange, Inc..
Last modified on 18 September 2018, at 09:12