The PHILIPPINE Stock Exchange (PSE) aims to launch new items in 2021 as part of its initiative to build an end-to-end digital experience for stakeholders.
In a tweet, the President and Chief Executive Officer of the PSE Company, Ramon S. Monzon, confirmed that one of the latest offerings is the start of short selling after some complaints from market participants have been cleared.
Mr. Monzon said the PSE needs to resolve the problems posed by foreign investors with regard to the rules and regulations on securities borrowing and lending (SBL) that will allow them to engage in the SBL programme.
He said three things required regulatory clearance, namely: the approval by the Securities and Exchange Commission (SEC) by the Philippine Depository and Trust Corp. (PDTC) to be a lending agent; the approval by the SEC of specified offshore properties as leverage for international SBL participants; and the go-signal by the Bureau of Internal Revenue (BIR) for the usage of the Global Master Securities Lending Arrangement.
“While there are no more products on the short sale programme, there is a lot of reliance on the SBL scheme,” said Mr. Monzon.
Short selling is the sale of a bond that is already held by the lender, but would be resolved by the delivery of borrowed securities. An investor may earn a profit by selling borrowed securities at higher rates, and then buying them at a cheaper price in the future.
Meanwhile, Mr. Monzon said the exchange plans to introduce a new sector classification scheme in the first quarter of the year.
The updated framework would provide two additional sector indexes to raise the indices to eight. It would also reclassify the existing manufacturing, utility and mining and oil industries into more defined sectors such as residential, electricity and utilities, industrial, mining and minerals, and technology, media and telecommunications.
Mr. Monzon also said that the second step of the web-based version of the PSE Electronic Allocation Framework (PSE EASy) is scheduled for 2021.
Step 2 of PSE Simple will consist of the extension of subscription products, which will involve follow-up and stock rights offers, and the introduction of online payment systems into the application.
PSE Quick is an application that helps participants to enroll and sign an initial public offering electronically to the local small investment program.
“It removed the need for investors to individually carry their forms and other specifications to the receiving centers, which is really helpful now that we are under tight group quarantine protocols,” said Mr. Monzon.
Other innovations scheduled for 2021 involve the launch of an online Know-Your-Client Portal (KYC) that will enable investors to open an account for those residing outside Metro Manila and overseas.
The PSE also aims to include a digital data analytics framework that will enable investors to track data on their own and a new clearance and settlement mechanism that is scheduled to be introduced in the second half of 2021.