SEC scraps minimum stockbroker commission fee

The Securities and Exchange Commission (SEC) on Wednesday announced the removal of the minimum commission stockbrokers may charge, as it seeks to boost trading in the local bourse by lowering costs for investors.

Through Memorandum Circular 7, the SEC now allows brokers to set their own commission schedule for transactions with their customers without the regulatory minimum commission, which was previously prescribed to range from 0.25% to 0.05% of the trade transaction value.

The SEC said the latest development is in consideration of the rise of online trading platforms, and took cues from other neighboring jurisdictions which also do not prescribe a minimum stockbroker's commission.

Investors are then encouraged to engage the services of a broker of their choice based on cost preference.

"Lower transaction costs are vital in encouraging the public to invest their money in the stock market. The removal of the minimum stockbroker's commission seeks to address this, and hopefully bring out more retail investors and spur trading activity," SEC chairperson Emilio Aquino said.

"The SEC will continue to review existing rules and regulations to see areas where we can make improvements to achieve our goal of boosting the capital market," he added.

The regulator last year approved the shorter settlement cycle, which allowed investors to receive proceeds from securities trades within two days versus three previously. — VDV, GMA Integrated News