SEC Chief Defends Term Limits for PSE Directors Amid Court Challenge

MANILA, Philippines — The Securities and Exchange Commission (SEC) stands firm on term limits for broker-directors of the PSE, saying the move will strengthen governance despite a court challenge by two longtime directors. On Friday, SEC Chair Francis Lim said the regulator will defend the policy after PSE directors Eddie T. Gobing and Ma. Vivian Yuchengco asked the Court of Appeals to void SEC Memorandum Circular No. 17, series of 2026. READ: Veteran PSE directors take SEC term rule to court “We are disappointed that, despite the SEC providing a reasonable two-year transition period for the implementation of this reform—following extensive consultations—we now find ourselves having to defend it in court,” Lim said. Earlier, Gobing and Yuchengco challenged the circular in court, which caps broker-directors’ tenure at 10 years in the same exchange. The petitioners accused the SEC of grave abuse of discretion, saying the measure is unconstitutional and beyond the regulator’s authority. On the other hand, Lim rejected this argument, saying shareholders remain free to choose among qualified candidates. “We see no deprivation of shareholders’ rights. Shareholders remain free to elect the directors of their choice from among those who are qualified under the law and SEC regulations,” Lim said. “The law does not recognize an unfettered right to elect any specific individual regardless of applicable regulatory qualifications,” he added. Moreover, Lim said serving on an exchange board is “a privilege, not a vested right,” and is subject to regulatory qualifications. READ: SEC floats 10-year cap on broker directors’ tenure in exchanges “Good governance requires board renewal, fresh perspectives and a commitment to advancing the long-term interests of our capital market above individual or institutional interests,” he said. Still, Lim said the policy is part of a broader push to make the Philippine capital market more competitive. “We respect the judicial process and are fully prepared to defend this reform,” he said. “If we are serious about transforming our capital markets, meaningful reforms cannot be put aside simply because they are difficult or face resistance.” The SEC chief said the regulator will remain “steadfast” in reforms to boost investor confidence and market integrity. /pai