MANILA, Philippines - The Philippine Stock Exchange (PSE) lauded the decision of the Securities and Exchange Commission (SEC) to grant the Capital Markets Integrity Corporation (CMIC) a self regulatory organization status (SRO).
The CMIC was granted a provisional SRO status or the authority to operate as the independent audit, surveillance and compliance unit of the PSE.
The provisional SRO shall be subject to review by the SEC after six months and the full status as SRO may be granted once the SEC is convinced that the CMIC is able to operate pursuant to its mandate.
"This is one of the cornerstone milestones for the equities market in terms of enhancing the corporate governance structure for market regulations. This positive development will also allow the PSE to focus on market and product development," said PSE president Hans B. Sicat.
CMIC president Antonio Garcia Jr. said "the board and management of CMIC are thankful to the SEC for its vote of confidence on CMIC and our commitment to market reforms."
Last year, the CMIC signed an agreement with the Korea Exchange for the acquisition and implementation of a surveillance system which will enhance its capability to monitor stock trading activities and strengthen market integrity.
The said system, called Exture Surveillance System, is targeted to be operational by the first half of 2012.
Integrated into the EXTURE surveillance system are detection rules, statistic analysis models, benchmarks and accounts relation and pattern recognition logics.
The accuracy of these analysis models is crucial for maintaining a fair and orderly market. The new surveillance system also features an Integrated Visual Analysis System (IVAS) tool that can visually illustrate the market at a glance.
Such a function reduces the average analysis and investigation time thereby increasing the efficiency of the whole market surveillance operations.
The new surveillance system is dynamic, efficient, scalable and reliable. At the minimum, the system is designed to support a market of 1 million orders/trades per day.
EXTURE can also adapt to any type of cash (whether equities or fixed-income instruments), derivatives inter-linked markets in the world.
CMIC is the successor company of the PSE's Market Regulation Division which was tasked with trading participant regulation and surveillance. The company is governed by a board composed of its president and CEO and four independent directors.(James A. Loyola)