‘Fearless’ Francis ready to battle friends as SEC rolls out reforms

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MANILA, Philippines — At the current rate he is moving with his reforms, Securities and Exchange Commission (SEC) chairperson Francis Lim may end up losing friends.

But “fearless” Francis cares little about that, as he believes that what he is doing is for the good of the capital markets and within the bounds of the law.

“This position was offered to me but before I took office, I was pushing back. And when I finally decided, part of the risk, I said, is that I will lose friends because what I am going to do will disappoint people, even my friends. But so be it,” Lim, who was appointed as chairperson of the SEC in June last year, shared.

And he has indeed “disappointed” some friends in less than a year since taking over the reins of the country’s corporate regulator.

Ma. Vivian Yuchengco, who is among the current broker-directors of the Philippine Stock Exchange (PSE) who will be affected by the SEC’s plan to impose a term limit on broker-directors of an exchange, has earlier hinted at seeking potential legal action.

Media giant GMA Network Inc. has also filed a case against the SEC for its circular imposing term limits for independent directors of publicly listed companies.

Lim admitted that the SEC’s move to strengthen board independence came at the dismay of some of his personal friends.

“These reforms are definitely not easy. They are encountering headwinds. Some, cases against the SEC. But we at the SEC will remain steadfast because for us, discipline today is what sustains credibility tomorrow,” Lim said.

For Lim, who previously served as president of business groups like the Management Association of the Philippines, Financial Executives Institute of the Philippines and Shareholders Association of the Philippines, the lack of self sacrifice serves as a major roadblock in achieving the shared-prosperity mindset in the business and corporate sectors.

“Because when we talk, we always talk about the good of the country. And when what the government is doing collides with our personal interests, we push back. I am now experiencing that,” Lim said, taking a jab at those in the PSE who appear to resist much-needed reforms.

“At the PSE, for example, we have been talking about how sad our market is compared to the other markets. But when we ready true reforms or our regulators call us to reform, we push back. Parang dapat gawin natin ito, pero pag hindi consistent sa interest ko, dapat exemption ako,” Lim, a former PSE president himself, said.

“So that’s the reason why we’re doing what we’re doing at the SEC. Trying to accelerate things. Sabi nila nagmamadali ako, pero sagot ko, matagal na dapat ginawa yan (They say I am rushing things. My answer: these should have been done a long time ago),” he added.

On the SEC’s plan to impose a term limit on broker-directors, Lim said comments and suggestions received from stakeholders are now being reviewed.

“I understand that PASBDI (Philippine Association of Securities Brokers And Dealers Inc.) filed an opposition. Although there are several business groups and people who are supportive of the term limits for broker-directors,” he said.

Under the SEC’s proposed guidelines, a broker-director may be elected for a term of one year, subject to a maximum cumulative period of 10 years, whether consecutive or intermittent, in the same exchange.

Lim said coming out with the final circular will depend on the complexity of the comments and the suggestions received by the commission.

“Of course we have to socialize and that’s the reason why we expose it for public comments. Because we’re not all-knowing. And in the past, there have been good ideas that were adopted in the final rules. You can’t think of everything. That’s why we’re encouraging people to comment on whatever draft memorandum circular that we have. Because others have experience on the ground, right? So they may have better appreciation than us regulators,” he said.

The commission is also studying comments received on its plan to lift the moratorium on the registration of new online lending platforms, while enhancing regulatory safeguards and supervisory requirements at the same time.

Higher capital requirement for lending companies

“On capital requirements, which we are raising, I think generally they’re in favor of higher capital so that only the good ones will remain,” Lim said.

“Presently, the capital requirement is only P1 million. And our experience is because the capital requirement is small, they’re so aggressive in lending. So aggressive that I even received complaints that even just looking at the website of the potential borrower, the next thing you know, they already have a loan approval. That shows how aggressive these small lenders are. They’re not doing due diligence,” he added.

The draft circular prescribes minimum paid-up capital requirements for financing and lending companies as well as for those that intend to operate online lending platforms. The required capital is proportionate to the number of online lending platforms they will operate.

The SEC also came out recently with rules on umbrella funds, which will apply to a newly formed or existing open-end unit-issuing investment company which consists of, or is to consist of, two or more sub-funds with segregated assets and liabilities.

The rules were issued by the SEC in recognition of the need to expand the structuring options of investment companies to allow the creation, within a single investment company, of sub-funds that may pursue different investment objectives, policies and strategies.

It also aims to provide investment companies and their fund managers greater operational flexibility and administrative efficiency, as well as investors with opportunities for enhanced and cost-efficient portfolio diversification.

“As I said, there are a lot of reforms that should have happened already in the past. So if you notice, our MCs (memorandum circulars) are coming out successively. Since I assumed, there were 14 MCs from June to December 2025. Now we’re more than that,” Lim said.

Lim assured that more “surprising” reforms are on the way under his watch. And no, not even his closest friends can stop him from pursuing them.