PSE mulls consolidation of 2 boards

MANILA, Philippines - The Philippine Stock Exchange (PSE) is mulling the consolidation of its second small and medium enterprise (SME) boards to ensure adequate protection of investors.

The PSE is revisiting its listing rules on both boards to conform to present times and further enhance the safeguards for the investing public.

 “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,” PSE chief operating officer Roel A. Refran said.

The PSE has temporarily deferred the processing of initial public offering applications under the two boards pending completion of the review.

Only companies with potential for superior growth and a market capitalization of at least P250 million can list on the second board. An applicant must also have an operating history of at least a year prior to listing.

Companies intending to list on the SME board, on the other hand, are evaluated based on the integrity and capability of their management and controlling shareholders, prospects for further growth and profitability, the viability of the business and sustainability of the projected earning stream.

The rules applied to the first board or large capitalized companies provide stringent track record and profitability requirements. Applicants must have a track record of profitable operations for three full years or a market cap of P500 million, provided it has a five-year operating history.

 The rules for second and SME boards provide a longer lock-up period and require additional progress and risks reports in line with the companies’ business plans and prospects. 

The temporary suspension of listings on the two boards has claimed its first culprit- FirstCarbon Solutions, a pioneer and industry leader in environmental sustainability solutions for business that recently obtained the Securities and Exchange Commission’s nod to launch an initial public offering of shares.

First Carbon is seeking to raise up to P30 million from the maiden sale of 20 million common shares at a maximum price of P1.50 apiece. The shares are intended to be listed on the PSE’s SME board.