SEC readies rules for lower public float requirements
The proposal to relax the public ownership rule—potentially enticing more listings from large corporations—will be decided purely on market interest, not on loud lobbying, according to the chief of the Securities and Exchange Commission (SEC).
The SEC is seeking public comments on the proposal to implement a tiered approach to the minimum public ownership (MPO) requirement for firms that want to access the stock market.
“The memo circular remains a consultation draft. No one should expect to have their way. Nothing is final,” SEC chair Francis Lim said.
According to the SEC, the proposed changes were meant to “strike a balance,” especially on market liquidity, investor protection and capital formation, as well as the competitiveness of the local bourse.
The adjustments also factored in global and regional trends in launching initial public offerings, changing regulatory frameworks abroad, the market’s absorptive strength and risk appetite.
Based on the draft memorandum circular, mega firms with an expected market value of more than P150 billion would have to offer only 12 percent of their shares to the investing public, down from the standard 20 percent. The float should also not be less than P22.5 billion.
Those valued at P50 billion to P150 billion would need a 15 percent float and a minimum offering of P10 billion.
Companies valued at P1 billion to P50 billion would have a minimum initial public float of 20 percent.
Firms with a market value of P500 million to P1 billion would need 25 percent.
Smaller corporations valued at less than P500 million would have to offer more at 33 percent.
After listing, the companies are still required to maintain their minimum float requirements. Those that fail to sustain them would have 12 months to restore compliance.
The public has until Dec. 23 to air their comments.
“We encourage comments and we assure the public that the SEC will decide solely on what is right for the market, not on who shouts the loudest,” Lim said.
Globe Telecom wants a smaller MPO as its e-wallet GCash eyes a stock market debut with a target valuation of $8 billion. The group earlier said the current float requirement was “quite rigid … given where our market is at.”
