PSE modifies listing rules

The Philippine Stock Exchange (PSE) is modifying its rules on determining the suitability of companies intending to list their shares at the bourse, noting in particular bankruptcy cases involving its officials as well the company’s medium-term viability.

Based on the proposed amendments to the PSE’s Listing Rules, the exchange said it has included the issuing company itself in the criterion that involves bankruptcy cases "to cover also the serious questions relating to the integrity or capability of the Issuers, particularly in cases of bankruptcy."

Under the existing rules, the PSE makes it a ground for disqualification if any of the company’s directors, executive officers, promoters or control persons have been involved in any bankruptcy petition during the past five years.

The PSE has proposed a number of changes in its listing rules last October, mainly focused on the additional listing of shares and requirements for rights offering. The planned amendments, however, are still working drafts and are subject to public comments and approval by the PSE Board and the Securities and Exchange Commission.

Aside from the bankruptcy record, the suitability rule for applicant firms also look into its stable financial conditions and prospects for continuing growth.

The PSE said to clarify these growth prospects, the "potential for superior growth" shall be based on the statement of active business pursuits and objectives of the Issuer, where it describes the steps or activities taken or proposed to be taken in order to advance its business for the next three years.

Another slight change involves the nature of the company’s operations, where under the present rules, such listing can be disallowed if the applicant company engages in operations which are contrary to the public interest, morals, good customs, public order or public policy.

In the proposed amendment, the words "good customs" were removed due to lack of legal basis for determining such. And replaced by "laws, rules and regulations" in order to have a more firm basis in applying the criteria. – Conrado Diaz Jr.