The Philippine Stock Exchange (PSE) is putting up a “prosecution fund” to help individual stock market investors in filing and prosecuting a criminal case against erring brokers/trading participants.

“The recent experience with failed brokers has taught the PSE a hard lesson. We endeavor to ensure investor protection from all possible fronts,” PSE President Francis Lim said.

The mechanics for the disbursement of the fund will be subject to the implementing guidelines of the PSE. All penalties collected by the PSE from trading participants will be automatically allocated for the prosecution fund.

An individual with a direct investment in any of the securities listed on the PSE may request, in writing through the Market Regulation Division (MRD), financial assistance from the fund to file and prosecute a criminal case.

To get assistance, the following requirements must be complied with:

– The criminal case is against a trading participant, its directors, officers and/or agents;

– The investor will jointly or collectively prosecute the case together with at least four other similarly situated investors;

– The actual civil claim of the investor against the trading participant must not be less than P200,000; and

– It is based on, related to, a violation of the Securities Regulation Code and its implementing rules and regulations.

The Market Integrity Board, upon a favorable recommendation from the MRD, will have the authority to decide whether to grant any financial assistance to an applicant provided that the maximum amount of the grant for each applicant shall not exceed P100,000.

“The fund is part of our corporate governance initiatives to help ensure that stock market investors are protected. Definitely, it is one of the building blocks to increase investor confidence in our stock market,” Lim said.