This is a blog entry of ABS-CBN's Maiki Oreta who covers business issues in the Philippines. Her blog, titled Business Banter, is her platform to share viewpoints, insights and intelligent rumors culled in between her formal coverages, as well as from coffee shop talks, boardroom buzz, and other sources.

The board of the Philippine Stock Exchange (PSE) fully backs Atty. Val Suarez as the president of the local bourse. This comes after the Securities and Exchange Commission (SEC), the regulator of the PSE, cited the exchange for “non-compliance,” since Atty. Suarez’s wife, Milagros Cecilia Dolendo Suarez, is currently the president of JP Morgan Securities Philippines and the firm’s Nominee to the PSE.

PSE Director, Vivian Yuchengco says, “For the first time in a long time, the PSE now has a very capable and highly qualified president.”

She also questions why the SEC failed to raise any questions on the matter during the six month period that Atty. Suarez sat, as the PSE’s Chief Operating Officer.

The PSE has tapped the country’s top two law firms, namely: Sycip Salazar Hernandez & Gatmaitan Law and Angara Abello Concepcion Regala & Cruz Law, for their legal opinions on the matter. Both law firms agree, that the PSE’s stance is both valid and legal.

Sycip Salazar Hernandez & Gatmaitan Law says, “Mr. Suarez will be disqualified only if he himself becomes associated with any broker-dealer or affiliate for a period of at least two years prior to his PSE appointment.”

A separate legal opinion, one from Angara Abello Concepcion Regala & Cruz Law states that, “The provisions under the Securities Regulation Code do not expressly restrict relatives by affinity or  consanguinity of a broker or dealer from being appointed as president or management of an exchange.”

Now, the other side of the coin, the SEC, has a different interpretation of the rules.

They assert that, under no circumstances, should the president of the exchange, nor its management, be linked (either directly nor indirectly) to a trading participant. The SEC also notes that hefty penalties will be imposed, on the PSE, if it does not comply with the regulator’s rules.

With both sides standing their ground, it looks like this matter will be one for the court to decide on.