“If you say [the two boards] get consolidated, and you now have a tighter set of compliance rules, maybe we’ll have to put a provision where there is a transition period for [SME firms] to move up to higher compliance rules,� Hans B. Sicat, Philippine Stock Exchange (PSE) president and chief executive, told reporters in a briefing late Wednesday.
“I don’t think you can immediately — from a fairness perspective — have them comply with the new rules,â€� Mr. Sicat said.
The SME board currently only has two members: information technology firm iRipple, Inc., and lending company Makati Finance Corp.
Requirements for those listed on the SME board could include the submission of a comprehensive five-year business plan and the requirement that firms have at least 500 stockholders, a three-year minimum operating history, a market capitalization of at least P250 million, and a minimum authorized capital of P100 million, draft rules show.
The local bourse is looking to merge the SME and second boards to improve investor protection.
In the meantime, the PSE is accepting public comments on the proposed board until today instead of the original Aug. 10 deadline in light of the bad weather that hit Metro Manila and surrounding provinces last week.
“The comments [we’ve been getting] have a wide range, depending on what constituent you are. That’s why we still need to have a real balance here. Clearly, the idea of consolidating [the two boards] was in one sense to make sure the rules were more or less comprehensive,� Mr. Sicat explained.
In a related development, Mr. Sicat went on to reiterate that the bourse is unlikely to budge from its earlier-announced mandate for listed firms to be 10% publicly-owned by the end of the year, or else face penalties leading to delisting. This, even as San Miguel Brewery, Inc. and Metro Pacific Tollways Corp. have been mulling exiting the local bourse in light of their deficient public float levels.
“In terms of the MPO (minimum public ownership) , we’re sticking with the guidelines we’ve set forth,â€� Mr. Sicat said. — F. J. G. de la Fuente