The Securities and Exchange Commission en banc has ruled that the appointment of Val Antonio Suarez as Philippine Stock Exchange president violates the Securities Regulation Code since his wife is currently a top official, stockholder, and salesman of a stock brokerage firm.

In a letter to the PSE, PSE market regulation director Jose Aquino said that this means Suarez is indirectly associated with a broker. Suarez’s wife, Milagros Cecilia Dollendo Suarez, is listed as the president of JP Morgan Securities Philippines Inc.

Section 33.2(h) of the SRC provides that “the president and other management of the Exchange [will] consist only of persons who are not members and are not associated in any capacity, directly or indirectly, with any broker or dealer or a member or listed company of the Exchange…”

Armed with opinions from two law firms, the PSE had argued that Suarez’s appointment is not covered by the prohibition in the SRC since this applies “only if he himself becomes associated with any broker-dealer or affiliated with it for a period of at least two years prior to his PSE appointment.”

However, the SEC en banc told the PSE that is had “considered your arguments but found the same untenable since the afore-quoted provision clearly prescribes both direct and indirect relationships of PSE President with broker-dealer.”

The SEC en banc had issued its ruling on August 19, 2010, a day after the publication of news reports based on a press conference called by the PSE on August 16 to contest the SEC findings and to express support for Suarez.

During the press conference, PSE chairman Hans Sicat read a statement stating that the PSE Board of Directors expressed its full support of Suarez as President and Chief Executive Officer (CEO) as he has met all the qualifications of the bourse.

Sicat who also chairs the Corporate Governance and Search Committees said “the Corporate Governance as well as the Search Committees of the PSE strongly believe that Atty. Suarez possesses the qualifications, skills, motivation and energy for handling the CEO job of the PSE.”