THE BANKERS Association of the Philippines (BAP) is reviewing a planned merger between the Philippine Stock Exchange (PSE) and Philippine Dealing & Exchange Corp. (PDEx) following the filing of an antimonopoly lawsuit against the latter.
“We are putting the discussion on hold until we sort out the case. We need to discuss if we will continue with the due diligence while the case is pending before the high court,” BAP President Lorenzo V. Tan said in a text message.
The matter will be taken up during a BAP board meeting today, Mr. Tan added, even as he expressed optimism that “a win-win situation on the case” would be found.
The BAP has a 25% stake in Philippine Dealing Systems Holdings Corp. (PDS Group), which is the holding company of PDEx. The PSE is another major shareholder of the PDS Group along with the Singapore Stock Exchange, each owning a 20% stake.
PSE Chairman Jose T. Pardo declined to comment on the issue, saying in a text message: “[I] would rather not comment pending feedback from our lawyers.”
The planned merger of the country’s stock and fixed-income exchanges has been scheduled for Nov. 30. This was put in doubt after a lawsuit was filed on Aug. 22 against PDEx, PDS Group, Philippine Depository & Trust Corp., Philippine Securities Settlement Corp., Bangko Sentral ng Pilipinas, Securities and Exchange Commission, the Finance Secretary, the National Treasurer, BAP and PDS Group President and CEO Vicente B. Castillo.
The case, filed before the Supreme Court, was pressed by former legislators Aquilino Q. Pimentel, Jr. and Luis R. Villafuerte, Sr., former Budget Secretary Benjamin E. Diokno and former national treasurers Caridad R. Valdehuesa and Norma L. Lasala.
“We are asking … [for] a TRO (temporary restraining order) on PDEx’s activity,” Mr. Diokno yesterday said in a text message.
The petitioners want to shut down the link between PDEx and the BSP’s Philippine Payments Settlement System, which enables banks to both process and settle fund transfers real time, and the Treasury bureau’s Registry of Scripless Security, which is the official registry of absolute ownership, legal or beneficial titles or interest in government securities.
Shutting down the platform does not mean the secondary trading would stop, Mr. Diokno said, Market players raised doubts, noting that not all have access to the Bloomberg terminal alternative. — A. R. R. Gregorio