PSE trims listing boards to two

MANILA, Philippines - The Philippine Stock Exchange (PSE) is trimming its listing boards to two, with emphasis on making sure companies planning to go public are viable.

The operator of the country’s sole stock exchange said the Securities and Exchange Commission has approved the PSE’s rules creating the two-board system: the Small, Medium and Emerging (SME) board and the Main Board.

“This new board structure shall replace the previous three listing board structure of the Exchange composed of the First Board, Second Board and the SME Board,” PSE said in a statement.

“As we continue to set new milestones for the market, the importance of a more relevant regulatory environment is paramount to spur a growing market,” said PSE president and CEO Hans B. Sicat.

Under the new rules, companies that will list on the Main Board must have an authorized capital stock of at least P500 million, and at least three years of operating history.

Such firms should also have cumulative earnings before income tax, depreciation and amortization (EBITDA) of at least P50 million for the last three years prior to listing.

“They must also have positive stockholders’ equity for the immediately preceding fiscal year,” PSE said.

To date, companies that want to list via the First and Second Boards are required to have an authorized capital stock of P400 million and P100 million, respectively. The First and Second Board requires at least a three-year and one-year track record of profitable operations, respectively, prior to the listing application.

Given the new listing rules, a company applying for listing on the new SME board must have an authorized capital stock of P100 million or more, of which a minimum of 25 percent must be subscribed and fully paid.

“The new rules should help raise the profile of publicly listed companies by putting in place requirements that will further show the viability of the companies listing in the PSE,” he said.

“The new features of these rules should, in the process, also help promote investor protection,” Sicat added.

Other salient features of the new rules for companies applying to list on the SME Board include the track record requirement, which requires an EBITDA of at least P15 million, excluding non-recurring and extraordinary income and/or loss, for the last three fiscal years.

“The applicant must also have a positive EBITDA in at least two of the three full fiscal years immediately preceding the application for listing, including the fiscal year immediately preceding the application,” PSE said.