MANILA, Philippines - The Philippine Stock Exchange (PSE) is relaxing the rules for oil, gas and renewable energy (RE) firms seeking to list on the local bourse to fund the development of their expansion.
PSE is seeking public comments on the proposed rules which were drafted with the assistance of the Department of Energy and the Securities and Exchange Commission and following a study on the regulations imposed by local and foreign regulators.
In particular, the exchange is easing the operating history requirement of the exchange under the second board.
Petroleum and RE companies, that may have superior potential but lack the operating history required under the rules, are unable to tap the local capital market due to the exchange’s existing rules.
The proposed rules aim to address the need to customize the listing and disclosure rules of the exchange for the benefit of companies engaged in petroleum production and renewable energy. The move is also in line with the PSE’s objective of seeing more companies traded on the exchange.
The PSE noted that petroleum and renewable energy firms, particularly those in the early stages of exploration and development, wishing to list on the bourse face certain hurdles with regard to the requirements for initial listing on the exchange.
Local investors, both small and institutional, are also limited in their ability to invest in and help develop natural resources in the Philippines because of the lack of listed natural resources companies on the exchange.
“This deficiency seriously impedes the growth and development of the country. In these times of rising energy and commodity costs and global instability, a key to national security for any nation, especially a small developing nation such as the Philippines, is the ability to exploit and develop its natural resources internally with less reliance on the global or outside market. Interruption or inefficiency in this process can impede national development and independence and result in threats to the country’s economy and national interests,” the PSE said.
The PSE said that while it recognizes the paramount need to accurately inform the investing public about the inherently risky and speculative nature of the petroleum and renewable energy industries, it also notes the large potential upside available to investors through investment in these sectors.
The exchange does not implement a specific and separate set of listing requirements and reporting standards applicable for petroleum and renewable energy companies which may be compared and similar to the Philippine Mineral Reporting Code (PMRC) for mining companies.
Under the proposed rules, the applicant firm should either be an operator or a co-venturer (which is a company that holds adequate interest in a service contract having the same rights and obligations with all of the other co-venturers) of a valid and subsisting service/operating contract duly approved and awarded by the government.
Applicants are required to submit the initial listing documentary requirements, either for an initial public offering or for a listing by way of introduction.
According to the PSE, the Listings Department, during the course of evaluation on the documents and representations made, may require applicants to submit additional documents.