Eleven business groups and associations opposed the Securities and Exchange Commission’s (SEC) proposal to increase its fees and charges, calling it “anti-business” and “unnecessary.”
The business groups, led by the Philippine Chamber of Commerce and Industry (PCCI) and Management Association of the Philippines (MAP) said the SEC should review, “if not totally scrap” the proposed increase in fees, saying it is detrimental to the economy.
“Consistent with the ease of doing business law, we then strongly recommend that SEC submit this proposed policy to the Anti-Red Tape Authority (ARTA) for a Regulatory Impact Assessment (RIA) to check against harmful impacts to business and the economy,” they said in a joint statement, adding there is a need for stakeholder consultations.
The business groups objected to “unreasonable, if not ‘obscene’ fees and charges,” such as the proposal to charge corporate issuers one-fourth of 1% of total indebtedness when creating bonded indebtedness.
“Using 2022 numbers, SEC’s fees would amount to PHP 1.27 billion on the total bond issuances of PHP 508 billion for that year,” the groups said.
The business groups also opposed the proposed fee on the total transactions cleared and settled in the previous year by Securities Clearing Corp. of the Philippines and Philippine Depository Trust Corp. at 0.1 basis point (bp) and 0.05 bp, respectively.
Based on the transactions in 2022, the groups said this would mean PHP 14.51 million and PHP 7.25 million in additional friction cost for stock market investors.
According to the business groups, the current fee collections of the SEC far exceed the cost of its operations.
“Proof of this includes the purchase of its own building in Makati commercial business district reportedly costing about PHP 2.5 billion, in addition to about 90 commercial parking slots estimated at about PHP 1 million per slot,” they said.
The business groups also cited the case of Philippine Association of Stock Transfer and Registry Agencies, Inc. versus Court of Appeals in which the Supreme Court held that “fee increases that have far-reaching effects on the capital market should be frowned upon.”
They also cited the case of First Philippine Holdings Corp. (FPHC) versus SEC in 2020 when the Supreme Court declared the fees imposed by the SEC for application of amended articles of incorporation as invalid and unreasonable for being arbitrary.
The current fee proposal by the SEC is even higher than the relevant fees struck down by the Supreme Court in the case of FPHC, they added.
“Fees that far exceed the costs of regulation are beyond the authority and power of the SEC to impose,” they said.
The business groups also noted the SEC’s proposal to impose “unconscionable” increases on fees may discourage new investments in the country.
“The increased cost of doing business will also hurt small and medium enterprises covered by SEC due to the ripple effects of the fee increases,” they added.
Sought for comment, the SEC is yet to respond as of press time.
Aside from the PCCI and MAP, the statement was also signed 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