MANILA - The Securities and Exchange Commission (SEC) has approved the Philippine Stock Exchange's (PSE) petition to exempt from securities law the appointment of two brokers as officials of the bourse, but warned this was the last time that such petition would be granted.

In a recent memorandum to the PSE, the SEC said it resolved in a meeting on June 11 to grant PSE's application to be exempted from Sec. 33.2 (h) of the Securities Regulation Code (SRC), which mandates that the exchange's management team and officers should not have been "a member or affiliated with any broker, dealer or member of the exchange for a period of at least 2 years prior to appointment."

This means William Ang, president of brokerage house Astra Securities, and Alejandro Yu, president of RS Lim and Co. Inc., may continue serving as the PSE's corporate secretary and treasurer, respectively, for a term of 1 year.

The SEC warned, however, that it "will not, in the future, entertain any similar request for relief from Sec. 33.2 (h) of the SRC," adding that the PSE will face severe sanctions if it fails to comply with this provision.

The exemptive relief granted by the SEC was the latest in the series of accommodations provided by the regulator when it comes to the appointment of brokers as officials of the bourse.

The SEC has allowed Yu to sit as treasurer of the PSE for over 2 years now. Earlier, it granted PSE's request to appoint Francisco Villaroman of brokerage firm Securities Specialist Inc. as corporate secretary. The most controversial was the case of former Supreme Court justice Jose Vitug, who served as chairman and independent director of the PSE while acting as legal consultant of listed firm Manila Electric Co. in 2008.

The said appointments have raised conflict-of-interest concerns that the SRC was meant to dispel in the first place.

The SRC, which was passed into law in July 2000, required, among others, that the PSE be made public and majority of its board of directors and management be non-brokers. This is to ensure that the exchange would always act in favor of small public investors rather than its member-brokers.