The Securities and Exchange Commission has removed the minimum amount of commissions that stockbrokers charge their customers as part of efforts to perk up the stock market.
The SEC on 16 April this year issued Memorandum Circular No. 7-24 for this purpose.
The new rule allows brokers to set their own commission schedule for transactions with customers without the limitations of a prescribed regulatory minimum commission. A 1977 SEC resolution previously set the broker’s commission at 1.5 percent.
Philippine Stock Exchange guidelines prescribed a minimum commission ranging from 0.05 to 0.25 percent of the value of a trade transaction.
“Lower transaction costs are vital in encouraging the public to invest their money in the stock market. The removal of the minimum stockbroker’s commission seeks to address this, and hopefully bring out more retail investors and spur trading activity,” SEC chairman Emilio B. Aquino said.
Removing the minimum commission recognizes the rise of online trading platforms and allows for more cost-efficient transactions. It also takes cues from neighbor jurisdictions who do business less a minimum stockbroker commission.
