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Long-time PSE broker directors Eddie Gobing and Vivian Yuchengco want the SEC to stop implementing a May 21 circular on term limits
Long-time PSE broker directors Eddie Gobing and Vivian Yuchengco want the SEC to stop implementing a May 21 circular on term limitsPhilippine Stock Exchange broker directors filed a petition against the SEC's rule imposing a 10-year term limit for broker directors, claiming it violates their rights.
The SEC's Memorandum Circular No. 17-2026 includes penalties for non-compliance, such as a P1 million fine per broker per year and a monthly penalty of P30,000. The petitioners argue that the term limits represent an abuse of discretion by the SEC and contradict constitutional protections and the authority granted to the SEC.broker directors filed a petition with the Court of Appeals, challenging the Securities and Exchange Commission’s rule that set term limits for broker directors.
SEC Memorandum Circular No. 17-2026 prescribes a cumulative 10-year term limit for broker directors, whether consecutive or intermittent. The memorandum prescribes a penalty of P1 million per broker per year, and a continuing penalty of P30,000 for every month that a broker director holds a seat in violation of the circular.
“ SEC MC No. 17, series of 2026 unconstitutional for violating Petitioners’ rights to due process and equal protection and VOID for being contrary to the Securities Regulation Code and Revised Corporation Code,” read part of the 56-page petition filed by Eddie Gobing and Vivian Yuchengco. Gobing and Yuchengco also want the CA to order the SEC to stop implementing the circular dated May 21, 2026.
The broker directors filed a petition for certiorari and prohibition, which is used to seek a review of another body’s decision or ruling.
“Petitioners submit that the imposition of maximum term limits for Broker Directors of the PSE – the only Exchange in the Philippines – was attended with grave abuse of discretion amounting to lack or excess of jurisdiction on the part of the SEC,” the petition read. “The Assailed Circular violates the due process and equal protection clause of the Constitution and is ultra vires or beyond the limits of the authority conferred on the SEC by its enabling statutes.
”is a self-regulatory body that ensures “a fair, efficient, transparent and orderly market for the buying, and selling of securities. ”Before the SEC memorandum, broker directors of exchanges may hold their positions as long as they are duly elected by the stockholders. Under the new SEC rules, broker directors may be elected for a term of only a year, with a maximum of 10 cumulative years. But the one decade period cannot be served continuously.
After serving five years, either consecutive or intermittent, a broker director shall have a one-year cooling-off period before they can be reelected again. The SEC memorandum cites a principle of the International Organization of Securities Commissions which states that “the length of board members’ terms of office would be relevant in assessing shareholders’ ability to participate actively in the nomination and election of board members. ” –
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