Lecture 8-CAPITAL MARKET

KNOWING THE
PHILIPPINE STOCK
EXCHANGE
What is the Philippine Stock WHAT CAN YOU DO TO BE

Exchange, Inc.? MORE ECO-CONSCIOUS?

Presentations are communication
tools that can be demonstrations.

The Philippine Stock Exchange, H O WInc.

C A N (PSE
Y O U I N For
LUENCE

Exchange) is a private non-profit and non-stock

OTHERS TO DO THE SAME?
Presentations are communication
organization created to provide and
tools that can maintain a
be demonstrations.

fair, efficient, transparent and

W Horderly
A T C A N B Emarket
D O N E T O for
SOLVE A COMMON PROBLEM?
the purchase and sale of securities such as stocks,
Presentations are communication
warrants, bonds, options and others.
tools that can be demonstrations.
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.
What is the role of the PSE?
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.
What is the role of the PSE?
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.
 Commitment of the PSE?
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.
 Commitment of the PSE?
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.
 Commitment of the PSE?
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.
 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. The Exchange also ensures that all legal
requirements under the Corporation Code and the Revised
Securities Act are met.
 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
 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.
The functional responsibilities of each
department:
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.
The functional responsibilities of each
department:
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 functional responsibilities of each
department:
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.
The functional responsibilities of each
department:

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 functional responsibilities of each
department:
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.
The functional responsibilities of each
department:
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.