In its effort to educate and increase public awareness, the Philippine Stock exchange has come up with a series of Investors Primers that will provide simplified answers to all inquiries related to the history, structure, components, operations, and procedures of the Philippine securities industry.


Investors Primer II: The Philippine Stock Exchange is the third of a series which hopes to guide readers on the basics of investing and participating in the Philippine stock market.


We hope that the information provided herein will result to a better understanding of the Philippine securities market and, in turn, encourage local and foreign investors to take part in our stock market.




President and Chief Executive Officer


Philippine Copyright 1999 by the Philippine Stock Exchange, Inc.
First Edition

Published by:   PSE Training Institute and

Research and Public Information Department
Philippine Stock Exchange, Inc.
Philippine Stock Exchange Centre
Exchange Road, Ortigas Center
1605 Pasig City

Tel Nos: 636-0122 to 41 locals 805,509, 510

Printed in Manila, Philippines

SBN 971-92134-1-8


A guide for Investors

Investors Primer II: The Philippine Stock Exchange, Inc.


Table of Contents

  1. What is the Philippine Stock Exchange, Inc.?
  2. What is the role of the PSE?
  3. How did the PSE begin?
  4. How is the PSE managed?
  5. How is the PSE organized?
  6. Where is the PSE located?
  7. What are the business hours of the PSE?
  8. How do you contact the PSE?


1. What is the Philippine Stock Exchange, Inc.?

The Philippine Stock Exchange, Inc. (PSE or Exchange) is a private non-profit and non-stock organization created to provide and maintain a fair, efficient, transparent and orderly market for the purchase and sale of securities such as stocks, warrants, bonds, options and others.


2. What is the role of the PSE?


The PSE bring together companies which aim to raise capital through the issue of new securities. Through the listing of their share in the stock exchange, companies can have easier access to funds. Raising new capital through an additional public offering is easier and less expensive when the company is already listed in the Exchange. Therefore, the PSE plays a vital role in the financing of productive enterprises that use the funds for growth and expansion of new jobs. It is therefore essential to the growth of the Philippine economy.


Furthermore, the PSE facilitates the selling and buying of the issued stocks and warrants. It provides a suitable market for the trading of securities to individuals and organizations seeking to invest their saving or excess funds through the purchase of securities.


Apart from these functions, the PSE has committed itself to (a) protecting the interest of the investing public; and (b) developing and maintaining an efficient, fair, orderly and transparent market.


Efficient      This means that orders are executed and transactions are settled in the fastest possible way. Some reforms have been instituted or are being carried out by the PSE to make the market more efficient, such as:

        installation of fully automated trading system;

        installation of computer trading terminals in cities outside Metro Manila to encourage the entry of provincial investors; and creation of a central cleaning and depository system to mobilized stock certificates and allow transfer of shares and funds by book entry.


Fair      This means that the PSE assures that no investor will have an undue advantage over another ,market player in trading by manipulating prices and engaging into insider trading. Insider trading is the act of buying or selling a particular stock based on certain privileged information which is not available to the public. As such it is considered as illegal and prohibited by the PSE.


Market Transparency      Transparency proceeds from the assumption that the investor can only make informed and intelligent information about the particular sock he wants to buy. The PSE requires listed companies to disclose timely, complete and accurate material information to the Exchange and the public on a regular basis. Such information would include stock price information, corporate conditions and developments which tend to affect stock prices like dividend, mergers and joint ventures, and the like.


3. How did the PSE begin?


      The Philippine Stock Exchange began 70 years ago, on August 8, 1927. Five Manila based businessmen, namely W. Eric Little, Gordon W. Mackay, John J. Russell, Frank W. Wakefield and W.P.G. Elliot felt that increasing trading activity would stimulate the business atmosphere. They got together, put their plan into action and founded the Manila Stock Exchange, the first Stock Exchange in the Philippines and one of the oldest in the Far East. It was originally located in downtown Manila, transferred in1970 to its own three-story building in Binondo, and then moved to Pasig in 1992.


      On May 27, 1963, the Makati Stock Exchange was organized by five other businessmen. These were Hermenegildo B. Reyes, Bernard Gaberman, Eduardo Ortigas, Aristeo Lat and Miguel Campos. It started it operations on November 16, 1965 and was located in Makati, then emerging center for finance.


      So, for about thirty years the Philippines had toe stock exchanges, the Manila Stock Exchange (MSE) and the Makita Stock Exchange (MKSE). Although the two exchanges remained as separate entities, they basically were trading the same listed issues.


      The existence of two stock exchanges in one country caused confusion among (prospective) investors because the two bourses had different policies, different members and, last but not the least, different stock prices for the same listed stocks.


      The idea to unite the two exchanges and have it managed by a professional group emerged and was attained when the Philippine Stock Exchange, Inc. was incorporated on July 14, 1992. To further consolidate logistics and to hasten the development of a more efficient capital market, the leaders of both bourses agreed to unify on December 23, 1993 under the PSE.


      On March 4, 1994 the Securities and Exchange Commission granted the Philippine Stock Exchange, Inc. its license to operate as a securities exchange in the country stating that “a unified Stock Exchange is vital in developing a strong capital market and a sustainable economic growth.” It simultaneously canceled the licenses of the MSE and the MKSE.


      The Philippine Stock Exchange is currently the only organized exchange in the Philippines licensed for trading stocks and warrants.


4. How is the PSE managed?

      One of the non-broker members heads the Exchange, appointed by the Board as the President and Chief Executive Officer (CEO). The President, along with the professional management of the PSE, executes the policy determinations of the Board and ensures that the Exchange is operating efficiently. It carries out for the members, listed companies and exchange system to ensure that stock market operation in the Philippines is kept within the standards of fairness, transparency, professionalism, trust and integrity. Additionally, it sets the rules and regulations of the Exchange, monitors its implementation and ensures that the investing public is given protection in the transaction of their investments. The Exchange also ensures that all legal requirements under the Corporation Code and the Revised Securities Act are met.



5. How is the PSE organized?


The PSE”S organizational structure holds five (5) groups, namely: Listings & Disclosure Group, Compliance & Surveillance Group, Operations/Automated Trading Group, Finance and Investment Group and Business Development & Information Group along with the Office of the General Counsel, Membership Department and Human Resources Management Department, which reports directly to the Office of the President.


The functional responsibilities of each department are as follows:


Listings and Disclosure Group               This group is composed of the following departments: Listing Processing, Legal Advisory and Corporate Disclosure. It processes and evaluates listing applications, conducts legal due diligence, and monitors compliance to continuing listing requirements including disclosure of listed companies. It also coordinates IPO (initial public offering) distribution.


Compliance and Surveillance Group      This group acts as the police of the Exchange. It is composed of the Compliance Audit Department, Special Investigation Department, Market Surveillance Department and Legal Section. Te group conducts legal audit and review aside from auditing of member-brokers books and operations. It also monitors the member’s compliance to set rules and regulations and enforces appropriate sanctions to violators or erring member-brokers. It takes responsibility in the operation of the surveillance activity, to ascertain that there are no illegal postings and dealings made in any of the issues listed in the Exchange.

Operations/Automated Trading Group               Placed under this group are the Computer Operations Unit, Systems Development Unit and Systems Integration and technical Support Unit along with the Trading & Settlement Department, Administration Department and PSE Plaza Operations Department to function as one group. It is considered as one of the most critical responsibility areas in the organization since it handles the operation of the automated trading and clearing and settlement activities for stock operations.


The Automated Trading Group examines and controls the monitoring, logging and analysis of computer system resource utilization; the maintenance of network connections of all workstations at the trading floor and remote offices; managing of database of off-floor installed sites; and the implementation and integration of the different components of the trading and office systems.


On the other hand, the Trading and Settlement Department monitors compliance of member-brokers to the clearing and settlement requirements of the settlement banks and central depository. It coordinates with these agencies and the custodian banks, both local and foreign, any trading discrepancies, irregularities or settlement concerns of the member-brokers and investing public.


The Administration Department and the PSE Plaza Operations Department handles the building maintenance, security and administration as well as the procurement management and utilization of supplies and equipment including the daily administrative requirements of the Exchange. It is also responsible for the daily dissemination of all the listed companies’ corporate announcements along with the foreign quotation report.


Finance and Investment Group               The group is responsible for the management of the company’s financial resources. It is composed of the Accounting Department, Treasury Department, Payroll and Budget Section and Investments Monitoring Section which handles the maintenance of book of accounts, preparation of financial statements and budget, management and placement of PSE funds, monitoring of accounts receivables and billing of accounts.


Business Development and Information Group      This group is comprised of the following: Product Development Department, Market Development Department, Research and Public Information Department, Corporate communications Department, PSE Training Institute and PSE Rule Book/Task Force Quality Unit.


The Product Development Department is in charge of the expansion, development and packaging of domestic and foreign financial products, equity-related securities, debt-related securities and other forms of securities and derivatives. It coordinates with private businesses, government agencies and associations in the overall development and packaging of the securities, derivatives and trading facilities.


The Market Development Department handles the expansion, development and monitoring of the investor base for both domestic and foreign market on an individual and institutional level. It looks at the PSE trading operation’s presence and positioning in the domestic, regional, and international markets including the expansion and development of market intermediation services and facilities covering secondary, over-the-counter (OTC) and third markets.


The research and Public Information Department is composed of the Research Services Sections, Information and Publications Section and the Public Information and Assistance Center (PIAC). It conceptualizes, processes, consolidates and handles multi-media dissemination of statistical and analytical information and studies related to the business requirements of members. It conducts research and provides information support to the expansion and development of the Exchange trading operations and its markets. It also maintains, develops and disseminates information through manual or electronic libraries and documentation. The department produces regular publications – Weekly Report, Monthly Reports, and Fact Book – that provide market users with a review of the market’s performance along with historical and current data on stock trading activities and listed companies. The Department also acts as the liaison of the Exchange through the sharing of data and information with foreign individuals, organizations and institutions.


Under the Research and Public Information Department is PIAC which implement the Exchange’s continual public assistance program by covering information promotion and facilitation along with complaints mediation in the physical center at the principal offices of the PSE. It also manages the operation of the PSE Souvenir Shop.


The Corporate Communications Department manages all forms of media and public relation through press releases, information and educational campaigns. It is in charge of managing and developing business promotional and marketing exposure requirements of the PSE including the production and dissemination of corporate internal bulletin and other forms of information materials.


The PSE Training Institute is responsible for the development of programs/curricula along with providing lectures, trainings and seminars about securities market participants. Aside from in-house seminars, it conducts road shows to investors in the provinces. The Institute also provides logistics support to all training-related activities of the departments in the PSE. In the future, the Institute plans to conduct activities such as the Certified Securities Representative (CSR) seminars and the technical and fundamental analysis seminars in the coordination with other intuitions.


The PSE Rile Book/Task Force Quality is responsible for the codification and the manualization of the PSE’s rules, guidelines, procedures and other legislative materials coming from government agencies, into a consolidated and comprehensive Manual of Rules of the Exchange.


The PSE Rule Book consists of five (5) volumes which are: (1) Corporate Rules, (2) Membership Rules, (3) Listing and Disclosure Rules, (4) Trading and Settlement Rules, and (5) Compliance and Surveillance Rules.


Membership Department      This department manages, implements and coordinates members’ requirements, planned activities and projects with the end in view of assisting PSE management in the expansion, consolidation and development of its membership. It also processes membership applications and various corporate changes of member-brokers for approval by the Membership Committee. It is in charge of circular preparations concerning membership, and the monitoring of financial statements of brokers and SEC licenses of its stock traders. In coordination with the Membership Committee, it facilitates memberships arbitration. Further, the Membership Department organizes and prepares social activities for all members.


Human Resources Management Department      This department, under the Office of the President, handles employee career management, administration of employee compensation and benefits, management of corporate culture and organization development, implementation of the company’s performance management system and formulation and enforcement of company policies. To ensure continuing organization and employee development, this department integrates the organizational structure/processes and workforce issues into the business equation and evaluates group processes and dynamics to tailor-fit results with a corporate staff training and management development program.


Office of the General Counsel          The Office of the General Counsel renders corporate legal services and serves as the primary legal advisor to the Board of Governors, the President, the Chief Operating Officer, the various departments, officers and employees of the Exchange. It also coordinates with the external legal consultants on matters referred by the exchange; represents the Exchange before judicial and administrative/quasi-judicial bodies; and, attend legislative and administrative hearings or meeting as well as draft position papers and/or comments to pending legislation and administrative issuances.


6. Where is the PSE located?


The PSE has two trading centers located at the PSE Centre in Ortigas, Pasig – where its executive officers are situated – and at the PSE Plaza in Makati City.


7. What are the business hours of the PSE?


Except Saturdays, Sundays, legal holidays and days when the Bangko Sentral ng Pilipinas (BSP) Clearing Office is closed, trading hours in the Philippine Stock Exchange shall be in one continuous session with the following daily schedule:   

A ten (10) minute extension from closing time shall be allowed to execute orders at closing prices.


8. How do you contact the PSE?


Mailing address :   Public Information and Assistance Center

                             Ground Floor, Philippine Stock Exchange Centre

                             Exchange Road, Ortigas Center

                                   Pasig City 1605, Philippines


      Telephone Numbers:  (632) 637-8818 (hotline)

                                         (632) 636-0122 to 41 (trunk)

                                          Loc. 403, 410


      Facsimile Numbers:   (632) 634-5113; 636-0812; 636-0806

                                         (632) 637-8813