Local firms may be allowed to list in bourse sans IPO

Local corporations required by law to go public may soon be allowed to list their shares at the Philippine Stock Exchange without going through an initial public offering (IPO).

This as the Securities and Exchange Commission has directed the local bourse to expand its "listing by introduction" rule to include local firms, particularly those that are mandated by law to undertake an IPO.

Under the PSE’s proposed rule, only companies which have a large number of shareholders and are listed abroad can list their shares by way of introduction.

SEC Chairman Lilia R. Bautista said the rule should be expanded because it is discriminatory to local firms. "It is limited because it would seem to apply to a foreign company," she said.

When revised, the new rule will make it easier for energy, oil and telecommunications firms to comply with their mandated divestment of shares.

In an IPO, a roadshow will be first conducted prior to the listing of the shares enabling investors to review the financial condition and prospects of a company.

The PSE itself is required to have its shares listed on the bourse by end-December this year with the aim of diluting broker shareholders’ interest in the exchange to a maximum of 20 percent of outstanding capital.

Under the Securities Regulation Code, no industry or business group is allowed to own more than 20 percent of an exchange.

In preparation for its full demutualization, the PSE has appointed ATR Kim-Eng Capital Partners Inc. as financial adviser for the planned listing of its shares.

Shareholders of the demutualized PSE prefer the introductory listing of the whole exchange rather than spinning off its clearing and settlement units and real estate assets.

The PSE has three subsidiaries – Securities Clearing Corp. of the Philippines, Philippine Central Depository and Philippine Stock Exchange Foundation Inc. – and some property assets.

In a recent caucus to get their inputs on the plans of the PSE to go public, shareholders of the exchange agreed to initially list the bourse’s shares via introduction or by directly listing and allowing trades on PSE shares without first undertaking an IPO.