How Does the Philippine Stock Exchange Protect Your Rights as an Investor?

Many people shy away from investing their investable funds in the stock mark. They’re afraid of losing their hard-earned money in this high-risk investment instruments.

Jay G. Peñaflor, our speaker in the BusinessCoach’s How to Invest in the Stock Market seminar on April 16, 2011, attested that you can lose money in the stock market if you’re not vigilant enough. But if you can gather all available information about your investments, gain sound knowledge on the stock market trends and not greedy, you can attend success in your stock market investing.

The Philippine Stock Exchange (PSE) Sr. Market Education Specialist said that Filipinos should not afraid to invest in the stock market, for stock market investors’ money are well protected. And as long as it is diversified and not placed in one basket, the risk of losing money is minimal.

In the Building Wealth with Stocks, A Basic Guide to Investing in the Philippine Stock Market, I learned that PSE and Securities and Exchange Commission (SEC) have put in place several safeguards that promote transparent, fair, and organized buying and selling of stocks where every investor, big or small alike, are protected from fraud, manipulative trading practices and erring stockbrokers.

Here are several safeguards that promote transparent, fair, and organized buying and selling of stocks.

Self Regulatory Organization Status
The PSE is a Self Regulatory Organization (SRO) as granted by the SEC. As such the PSE acts as the “police” of the stock market and it is the SRO status that empowers it to formulate marketplace rules, and impose penalties or sanctions to market participants who will not comply with these rules.

Customer First Policy
Further, PSE regularly monitors and audits the operations of stock broker. It ensures that business and trading practices of stockbrokers conform with the laws stipulated in the Securities Regulation Code of the Philippines including the Customer First Policy, whereby stockbrokers’ orders must always surrender priority to their client.

Risk Based Capital Adequacy
The Risk Based Capital Adequacy is a PSE regulation that ensures that stockbrokers have enought capital to cover its exposure to risks. It also ensures that stockbrokers are financially sound or liquid enough to promptly settle claims and other obligations to client.

Disclosure Rule (10-minute Rule, Online Disclosure System, and Selective Disclosure Rule)
Since timely and reliable company disclosures are essential components of a fair and efficient market, the PSE also sees to it that listed companies promptly disclose only factual and truthful information.
In fact, the PSE requires that material information that may affect a listed company’s share price positively or negatively, are disclosed within 10 minutes after its occurence. This rule embodied in the 10-minute Rule.

Disclosures must also be done first to the PSE so that it will cascade information to every investor and general public through its communication channels and not to a selected group of individuals only. This is also known as the Selective Disclosure Rule.

Also disclosures are transmitted through a sophisticated computer system known as the PSE Online Disclosure System or OdiSy. Non-compliance or violations of listed companies to PSE Disclosure Rules are heavily penalized with fines, suspension, or even delisting from the PSE.

Advanced Warning and Control System
The PSE regulates the stock market through its Market Regulatory Division (MRD). It monitors the market through a word-class and sophisticated surveillance system called Advance Warning and Control System or AWACS.

AWACS is equipped with the critical elements of the surveillance process and provides a robust monitoring and warning mechanism. It is designed to protect the integrity of the equities market from fraud, manipulation, and breaches of marketplace rules, It monitors and detects unusual stock price or volume movement possibly brought about by insider trading and other manipulative trading practices. From the information provided by AWACS, MRD conducts investigation or unusual price and volume movements to identify and prosecute stockbrokers or investors who might have committed price manipulation practices.

Market Integrity Board
The Market Integrity Board is independent body created by the PSE to oversee stockbrokers’ compliance with the rules governing market transactions.

Securities Investors Protection Fund
Another tool created for the protection of investors is the Securities Investors Protection Fund, Inc. or SIPF. The SIRF, which is comparable to the Philippine Deposit Insurance Corporations providing insurance for bank deposits, seeks to build and enhance investor’s confidence in the market and is envisioned to protect the investing public from extraordinary losses, other than the ordinary market fluctuation, arising as a result of fraud, failure of business, or judicial insolvency of PSE-accredited stockbrokers. Protection to investors is automatic upon the opining of an account with a PSE-accredited stockbroker and given by way of compensation for trade-related obligations of stockbrokers to its customers.

These safeguards, along with other investor protection initiatives of the Philippine Stock Exchange, serve to protect the health of the equities market and the integrity of capital formation process, making investing in the Philippine stock market secure.


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Simple Reasons Why Your Start-Up Will Crash

Thinking about doing a start-up?  Congratulations, I applaud your ambition and drive.  Just remember, you have now committed yourself to a future full of uncertainty and adventure.  Even though I will be stepping you through some cautionary advice, (like my older brother always does to me before any launch – someone has to play devil’s advocate, right?), the focus of this article is to stay encouraged and focused.  Just don’t make these simple mistakes.  I’ll step you through them on a simple level so it is easy for you to understand and take in.

As much as I believe you are the exception to the rule, studies show that the vast majority of new businesses fail.  It is possible to get a successful business venture the first time around but the chances are against it. Understanding why entrepreneurship efforts fall short could keep you from experiencing the same fate.  Here is the list from my experience:

Trying to contend against the leaders

Most business men start off wanting to be the most successful in the entire industry.  The big mistake made is competing with large companies within the same niche.  Large companies possess a large resource pool and a solid client base permitting them to easily get rid of competition by offering lower prices, using superior advertising techniques etc.  A brand new business with fewer resources ought to find creative methods to succeed in an industry.  In other words, quit being a hero and go smaller sized. The more compact your niche, the more targeted your customers are.  There is a saying which says “if everyone is your consumer, than no one is your customer.”

Trying to do almost everything

An entrepreneur that tries to handle many aspects of a business can become ineffective and therefore lead to failure. This over-generalization prevents you from concentrating on the accessible resources on providing exceptional services to clients.  The inferior services provided repel clients.  An entrepreneur should concentrate on supplying the best services on a particular niche, and should go for a niche that has the opportunity to cultivate and is currently underserviced.  A little research will bring out a few untapped opportunities.  Even most important, outsource whenever you can.  The power of delegation can go a long way.  You would be surprised what can be done just be simply empowering other people.

Not having sufficient funds

This leads to a lot of failures.  Undervaluing how much capital you will need to operate this company until it becomes profitable will most certainly spell doom for your business.  This is because expenses previously overlooked occur at the most unexpected times. This will drain your business fund causing a failure.  An excellent idea will not develop into huge profits without adequate funding.

Having an incompetent team

The team the founder goes into business with will determine whether or not the venture will succeed. Most entrepreneurs create an incompetent team or go into business with individuals for the wrong reasons.  Running a company is very challenging and possessing a team that cracks under pressure will result in failure.  You will need to select your team cautiously, not simply off their LinkedIn profile or resume.  Everyone has to have a common vision and push to succeed.

Going into business for weak reasons

Many entrepreneurs go into business for flimsy reasons.  For example, a young man can begin a software development company so that he can be the next billionaire without sufficient planning on how to achieve it.  These weak reasons don’t stand the test of time causing a person to give up along the way.

Micromanaging the business

A business owner is supposed to simultaneously handle many aspects of the business. This enables you to lose sight of business goals.  To avert this, you need to develop the ability of delegating duties to your team members.  Micromanaging a business also creates animosity in the team as they believe their skills and input is not valued enough.  Micromanagement has spelt doom for many businesses.  Enable your employees and provide them possibilities to create within their positions. This assurance in your people will build an infectious and positive culture in the organization.

Re-read these words of advice over and over again.  Once that is soaked it, I would recommend studying some other tales of caution in the start-up world.  They were instrumental on the early success of my own start-up.  Best of luck to everyone.  If you feel I have missed some ideas, I would love to hear your thoughts in the comment section.


Author Bio:

Tanner Mangum is a start-up rookie, snowboarder, proud father of 2 and marketing director at Kangarew, home of the coolest iphone wallet case on the planet.


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Keep the Track on Today’s Stock Market and Your Investments

I’m fortunate that I attended BusinessCoach’s How to Invest in the Stock Market seminar last April 16, 2011. I learned much from Jay G. Peñaflor, a Philippine Stock Exchange Sr. Market Education Specialist, on the basics of investing in the stock market. He adviced us participants that to avoid loses in the stock market, we should gather all available information about our investments.

He said that it’s always good practice to be informed about your investments and there are several ways by which you can monitor the stock market and your stock investments, particularly, for stock price movements, corporate news and updates, and other relevant market information.

1. The PSE website ( is a very good source of information about the stock market and the specific stocks that you invest in. The following are some of the basic infomation available to you in the website:
a. PSE News
b. Corporate Disclosures
c. Market Information
i. Stock Quotes
ii. Gainers/Losers
iii. Active Stocks
iv. Dividends/Rights
d. The PSE Index Chart
e. Listed Company Update
f. IPO News
g. PSE Regulations
h. Trading Participant News

2. The PSE Library contains a wealth of stock market-related reports, books and other reading materials. It is open to the public for free from 9:00 a.m. – 12:00 nn and from 1:00 p.m. – 4:00 p.m., Mondays to Fridays. The library is located at the 4/F PSE Centre, Exchange Road, Ortigas Center Pasig City. You can contact the PSE Library at telephone number (632) 688-7525.

Stock market related publications are also available at the PSE Public and Investor Relations Section (PIRS) at the G/F PSE Centre, Exchange Road Ortigas Center, Pasig City, with telephone number (632) 688-7600.

3. Contact your stockbroker or access your account online for any market infomation and details of your investments. You can also find information on prices, bid and ask values, traded volumes, and research reports and analysis on listed companies.

4. Stock market information from major newspapers, television, radio and the Internet.

Learn How PSE and SEC Protect Your Rights as an Investor? >>>


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