THE SECURITIES and Exchange Commission (SEC) is drafting a capital
market development plan (CMDP) blueprint for year 2011-2016 that will
likely address key issues such as taxation and investments.
"The CMDP is a subset of the national development plan, which is being
prepared by the National Economic and Development Authority," Virgilio
V. Salentes, director of SEC's economic research and information
department, said in an interview late last week.
He said the development plan is aimed at improving, and expanding the
capital market.
"[We are doing this] to know how far or close are we even to other
[markets] in ASEAN region. So that, we could at least meet the benchmark
in terms of the direction [of the capital market] and level of
maturity," he said.
Mr. Salentes, who is in-charge of the over-all secretariat, said there
are four technical working groups, co-chaired by consultants from the
private sector, in the area of equity, fixed income, taxes, and
alternative products.
He, however, could not give specific details on the proposals since the
four technical working groups have yet to submit their proposal by the
end of the month.
"The original plan is it will be launched on March 2012. We have started
working last October," he said. "It will be then submitted to Finance
Secretary Cesar V. Purisima and it will be endorsed to President Benigno
Simeon C. Aquino III."
He, however, said that contents of the CMDP would include some of the
points that were raised and proven effective in the CMDP for year 2005-2010.
"They could pursue the fallouts in the previous plan, depending on the
recommendation. Or they could retain and strengthen those which are
proven effective," he said.
The CMDP 2005-2010 blueprint had 11 key objectives, such as urging the
government to promote long term investment and correct uneven tax
preferences affecting competitiveness; enhanced listing and expansion of
traded products such as the Philippines Stock Exchange (PSE) targeting
10-12 companies listing per year; and SEC allowing listing by the way of
introduction, among others.
Mr. Salentes said some of key proposal in the new CMDP would likely
delve on Real Estate Investment Trust (REIT) and taxation, adding those
policies that will need legislation would be lobbied in the congress.
Manuel N. Tordesillas, president of the Investments House of the
Philippines and the co-chair in the technical working group on
alternative products, said the group is currently developing proposals
that would assist SEC and PSE to come up with rules on issuance of
exchange traded funds.
"The technical working group is specifically developing recommendations
and ideas with respect to assisting the SEC and PSE to come up with the
rules that will regulate the issuance of exchange traded funds," he said
in an email sent to BusinessWorld on Saturday.
Exchange traded funds are securities that track an index, a commodity or
a basket of assets like an index fund, but trades like a stock on an
exchange.
"The group will also promote the actions of the Bankers Association of
the Philippines and Bangko Sentral ng Pilipinas to reconcile the rules
on the issuance by banks structured products such as derivatives,
together with the Securities and Exchange Commission to make them
consistent with the rules under the Securities Regulation Code on
options and warrants," Mr. Tordesillas said.
"Finally, the technical working group will make recommendations to the
Capital Markets Development Council to further enhance the development
of alternative investment products such as REIT, asset securitization,
and others that may qualify under PERA (Personal Equity and Retirement
Account)," he added.
PERA law or Republic Act 9505, was signed in 2008 to encourage people to
save up for retirement.
Sought for comment, market analyst Astro C. del Castillo, managing
director of brokerage firm First Grade Holdings, Inc., said investors
protection should be heightened in the new CMDP.
"The government should encourage more investments from the people and
the people investment's should be protected, particularly rights of the
minority shareholders," Mr. Castillo said in an interview late last
week. -- Cliff Harvey C. Venzon
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