The Securities and Exchange Commission (SEC) has approved a set of guidelines addressing certain regulatory issues relating to the planned Asean trading link seen to go online by the first quarter of 2012.

The guidelines provide a broad range of exemptions with regard to local registration or licensing requirements for foreign securities and investment advisers. Foreign brokerage firms will also obtain such exemptions if they “partner” with a local broker.

The guidelines also define the current and planned limitations on information sharing between exchanges and regulators.

Safeguards were also detailed, with the Philippine or sponsor broker expected to assume regulatory compliance on behalf of its foreign counterpart.

Further details relating “dispute resolution” between cross-border transactions still need to be thrashed out, with the first of a series of meetings to be held on Monday in Bangkok, Thailand.

The guidelines were outlined in an SEC memorandum approved during the corporate regulator’s recent en banc session.

The memorandum was issued in response to a request made by Philippine Stock Exchange and its trading participants to clarify regulatory concerns on the Asean Link, which will facilitate cross-border stock trading between the Philippine, Malaysian, Thai and Singaporean bourses.

In line with policies in other participating exchanges, the SEC said foreign securities need not be registered in the Philippines.

The corporate regulator will instead grant exemptive relief in favor of  stocks registered in the participating exchanges. The exemptions also cover special stock classes such as stock dividends or rights offerings.

The SEC will also exempt a foreign broker from the required licensing requirements should it partner with a Philippine broker to conduct cross border trading. The partnership will be sealed via a bilateral agreement between the foreign and local sponsor.

The sponsor broker will also “ensure regulatory compliance and conduct post-trade” settlement activities.

Foreign investment advisers can forego the registration requirement should their research materials be coursed through a sponsor broker, who will again assume responsibility for the contents to be distributed to clients.

Foreign brokers and investment advisers will only be required to register if they maintain a physical presence in the country, the SEC clarified.

Moreover, information sharing between participating bourses and regulators shall be governed by Philippine laws. A memorandum of understanding has already been signed among regulators.

For the exchanges involved, a separate “information sharing agreement” could be formulated to the extent allowed by their respective laws and regulations, the SEC said.

The Philippine corporate regulator also confirmed that the Asean link itself will be exempt from any registration requirement.

The PSE, one of the smallest bourses in the region, sees the linkage as one tool to boost market activity and help give Philippine stocks more exposure overseas, although some brokers remain skeptical about the plan.

Joseph Roxas, president of local stock brokerage firm Eagle Equities Inc., noted that there are other issues to consider, including the higher tax rates levied on local stock transactions.

“The foreign investors who want to come in are here already. Some locals want to go out. The concern is what might come out of the [Philippine] market,” he said in a phone interview.

Local stock market investors, while comprising about 60 percent to 70 percent of daily turnover, still account for less than 1 percent of the Philippine population.

The Asean link is a part of the Asean Exchanges collaboration among seven exchanges to promote the region as an asset class.

The seven exchanges include Bursa Malaysia, Hanoi Stock Exchange, Hochiminh Stock Exchange, Indonesia Stock Exchange, PSE, The Singapore Exchange and the Stock Exchange of Thailand.