REIT trade issue clarified

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    The Philippine Stock Exchange (PSE) said it has granted last Friday, August 14, stockbroker Colfinancial.com a certificate to accept orders and facilitate trade of real investment trust (REIT) as of yesterday, August 17.

    This follows after the Securities and Exchange Commission (SEC) said over the weekend it was looking into the failure of several brokers, Colfinancial included, to conduct REIT trade last August 13, AREIT Inc.’s listing day.

    The PSE also said five stockbrokers have yet to obtain their certificates to trade real REIT.

    These are Globalinks Securities and Stocks Inc., RCBC Securities Inc., UCPB Securities Inc., Philstocks Financial Inc. and Unicapital Securities Corp.

    The PSE said their certificates are being processed.

    “Brokers with online trading customers use either the PSE’s online trading system or systems from third-party providers (TPP),” the PSE said in response to reports that certain stockbrokers failed to facilitate REIT trading last week.

    The SEC, in particular, noted complaints of investors against stockbroker Colfinancial.com for not executing their orders on AREIT which they claimed caused them losses as the REIT shares lost value.

    On its listing day, AREIT, which is the first REIT fund to list with the PSE, lost 7.78 percent of its value closing at P24.90, compared to its initial public offer price of P27 apiece. It went on to lose another 3.21 percent on Friday, closing at P24.10.

    “The REIT rules require that all investors trading in REIT stocks must have an NOCD (name on central depository) account before they are allowed to buy/sell REITs. Also, the REIT rules require that only traders that have undergone the eligibility training and qualification are allowed to trade REITs. PSE’s trading system has been configured to comply with these REIT rules,” the PSE said.

    “Brokers with TPP systems need to have their systems tested and certified by PSE to be operationally ready as required by SEC (i.e., system will reject orders from customers without NOCD accounts and/or orders from non-eligible traders),” it added.

    The PSE, however, said despite this, the five stockbrokers “were able to manage their clients and instituted a process on how to handle their client orders.”

    Colfinancial.com appeared to have failed to manage its clients’ expectations as it only obtained its certification only granted on Friday, thus it can only trade REIT Monday.

    The SEC over the weekend said it is “currently gathering more information and assessing the situation.”

    “Rest assured that the Commission shall take appropriate actions toward the resolution of the matter at the soonest time possible in the interest of the investing public,” the SEC said.