The Securities and Exchange Commission is standing firm on its proposal to impose term limits on broker-directors, signaling readiness to defend the measure in court amid opposition from affected parties.

Speaking to reporters on the sidelines of the EJAP Sustainability Forum in Makati City, SEC Chairman Francis Lim said the regulator remains committed to the draft memorandum circular (MC), which seeks to cap the cumulative tenure of broker-directors at 10 years to strengthen governance and board representation.

“We honestly believe that it’s the right thing to do for the market and we will stand by that decision. We are still in the process of receiving comments, and we will decide what is best for the market after considering those comments,” Lim said. 

“We’re not afraid to go to court if they want to go to court,” he added.

The proposal, released on 3 March, sets a structured limit on the length of service for broker-directors—individuals representing trading participants on exchange boards. 

Under the draft, a broker-director may serve up to five years, whether consecutive or intermittent, followed by a mandatory two-year cooling-off period. 

A final term of up to five more years may be served, provided the total tenure does not exceed 10 years.

The SEC said the measure is designed to promote “fair and effective representation” and allow qualified brokers to bring “new perspectives” to exchange boards.

If adopted, the policy would affect several long-serving broker-directors at the Philippine Stock Exchange, including Ma. Vivian Yuchengco, Eddie Gobing, Wilson Sy, and Diosdado Arroyo. 

Yuchengco, who heads First Resources Management and Securities Corp., earlier said ownership rights must also be respected and that she would have her lawyers review the matter.

Support for the proposal has come from key business groups, including the Management Association of the Philippines, Financial Executives Institute of the Philippines, Institute of Corporate Directors, Capital Markets Development Foundation Inc., and the Investment House Association of the Philippines.