THE Securities and Exchange Commission (SEC) remains firm on its proposal to impose term limits on broker directors of the Philippine Stock Exchange (PSE), despite opposition from some market participants.
SEC Chairman Francis Lim described the limits as “non-negotiable,” but said the commission was still open to feedback during the public consultation period.
“As far as I’m concerned, term limits are non-negotiable. But I’m still listening to their comments. If they have a valid comment, we’ll consider it,” he said.
The proposal seeks to impose a cumulative 10-year term limit on broker directors and a corresponding cooling-off period.
Lim said the measure would be permanent and also rejected claims that the plan would violate shareholders’ rights, stressing that investors would still be able to elect new representatives.
“We’re not depriving shareholders of their right to vote. They can vote brokers to replace those whose terms are ending,” the SEC chief said, adding that he is confident the proposal does not violate any law.
The SEC has given stakeholders 15 days to submit comments, after which these will be consolidated and reviewed by the commission en banc before a final decision is made.
Opposition has emerged from some industry figures, including Vivian Yuchengco, who argued that limiting broker-director tenure undermines shareholder rights.
Yuchengco, who leads First Resources Management and Securities Corp., has had multiple stints on the PSE board spanning several decades and previously served as its chair in the early 2000s.
She also made history in the late 1980s as the first woman to head the Makati Stock Exchange.
“We are owners. We are shareholders of the PSE ... You can’t limit us,” Yuchengco said.
She also questioned the inclusion of independent directors, noting the difficulty of finding qualified candidates.
“Independent directors are very hard to find — the ones with integrity, who know your markets. It’s hard. And why do you want to limit that?” she said.
Yuchengco said she is prepared to challenge the measure but would leave legal action to lawyers, adding that her immediate concern was the impact on broker-directors.
As this developed, the Shareholders' Association of the Philippines (SharePHIL) has expressed support for term limits, saying the move would strengthen corporate governance and protect minority investors.
The group said the initiative would help ensure regular board refreshment, prevent entrenched leadership, and allow new perspectives to be integrated into the PSE’s governance structure.
“The commission is laying the groundwork for meaningful board renewal,” SharePHIL said, noting that the proposal aligns with globally recognized governance standards, including principles promoted by the International Organization of Securities Commissions.
SharePHIL added that the move was consistent with the SEC’s mandate under the Revised Corporation Code of the Philippines to adopt rules aligned with international best practices for the benefit of the investing public.
The association also said that its position was shared by several business groups, including the Financial Executives Institute of the Philippines, Institute of Corporate Directors, Management Association of the Philippines, Capital Market Development Foundation Inc., and Investment Houses Association of the Philippines.
