Friday, June 21, 2024

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Business

The proposed increase in fees by the SEC is facing criticism.


ELEVEN BUSINESS GROUPS

Organizations and groups objected to the Securities and Exchange Commission’s (SEC) plan to raise their fees and charges, deeming it as “anti-business” and “unnecessary.”

The PCCI and MAP, representing business groups, urged the SEC to evaluate the proposed fee increase and consider scrapping it altogether as it could have negative effects on the economy.

In accordance with the legislation on facilitating business operations, we highly suggest that the Securities and Exchange Commission (SEC) present this proposed policy to the Anti-Red Tape Authority (ARTA) for a thorough evaluation of its potential effects on businesses and the economy, as stated in a collective statement. It was further emphasized that engaging stakeholders in discussions is crucial.

The business organizations opposed the proposal to charge corporate issuers a fee of 0.25% of their total debt for creating bonded debt, citing it as unreasonable or even “obscene.”

According to the groups, the SEC would collect P1.27 billion in fees based on the bond issuances of P508 billion in 2022.

The business organizations expressed their disapproval of the suggested charge for all transactions processed and finalized by the Securities Clearing Corporation of the Philippines and Philippine Depository Trust Corporation in the previous year, which were set at 0.1 and 0.05 basis points (bp), respectively.

According to the transactions in 2022, the groups stated that this would result in an extra cost of P14.51 million and P7.25 million for stock market investors.

Based on reports from business organizations, the SEC’s current fee earnings are significantly higher than its operational expenses.

The evidence for this is shown by the acquisition of a building in the Makati commercial district, which is said to have cost approximately P2.5 billion. Additionally, they have obtained about 90 commercial parking spaces, each valued at around P1 million.

The business organizations also mentioned the instance of Philippine Association of Stock Transfer and Registry Agencies, Inc. versus Court of Appeals, where the Supreme Court ruled that “fee hikes with significant impact” cannot be implemented without proper consultation and justification.ff

Investments in the stock market should be discouraged.

In 2020, the Supreme Court ruled in the case of First Philippine Holdings Corp. (FPHC) versus SEC that the fees charged by the SEC for amending articles of incorporation were invalid and arbitrary.

The SEC’s present fee plan is greater than the fees that were deemed unconstitutional by the Supreme Court in the FPHC case, according to their statement.

They stated that the SEC does not have the authority or power to impose fees that are significantly higher than the costs of regulation.

The business organizations also mentioned that the SEC’s plan to implement excessive fee hikes could potentially deter potential investments in the nation.

The rise in business expenses will negatively impact small and medium-sized companies under SEC coverage, as the higher fees will create a ripple effect.

The SEC has not yet responded as of press time when asked for comment.

In addition to the PCCI and MAP, the declaration was also endorsed by the Philippine Retailers Association, Philippine Franchise Association, Chamber of Thrift Banks, Philippine Exporters Confederation, Inc., Federation of Filipino Chinese Chambers of Commerce and Industry, Inc., Employers Confederation of the Philippines, Philippine Association of Legitimate Service Contractors, Stratbase ADR Institute for Strategic and International Studies, and Philippine Food Processors and Exporters Organization, Inc.  Justine Irish D. Tabile