“We are proceeding with a review of our listing rules to enhance the safeguards for the investing public. One of the options we are looking at is consolidating both second and SME (small and medium enterprise) boards to enhance investment protection features,� Roel A. Refran, PSE chief operating officer, said in a statement released over the weekend.
This comes as the PSE last Thursday announced that it was directing a review of the initial public offering (IPO) listing rules of the second and SME boards.
“We are aligning and updating our rules with the times, which we believe will be beneficial in the long-run for both the companies wishing to list on these boards and the market,� Mr. Refran said,
As a result, the PSE said it will not be acting on any initial listing applications under the two boards, the statement read.
Currently, the PSE is composed of three listing segments: the first, second, and SME boards.
The first board caters to companies with large capital and operating histories, among other added requirements, while the second board is reserved for companies with a minimum market capitalization of P250 million, a minimum authorized capital stock of P100 million, and an operating history of at least a year prior to listing.
The SME board, on the other hand, serves firms with an authorized capital of at least P20 million and a maximum of P100 million, net tangible assets of at least P5 million, a positive net operating income, and an operating history of at least a year prior to filing of a listing bid.
“In the event the PSE review leads to possible amendments to existing rules, we will be submitting this to the public for comments and to the Securities and Exchange Commission (SEC) for final approval,� Mr. Refran added.
The PSE had earlier said that it has become wary of secondary offerings listed on the second and SME boards, as issuers are suspected to be using the route to exit earlier listed companies.
Sought for comment, Eduardo V. Francisco, president of investment banking firm BDO Capital Investment Corp., said the rules review could encourage more companies to list as long as changes are signaled early to aid planning. — Franz Jonathan G. de la Fuente