SEC revises rules on shelf registration of securities

MANILA, Philippines - The Securities and Exchange Commission (SEC) is introducing the revised rules on shelf registration for the issuance of securities.

The amendment will allow companies to enjoy more flexibility in raising funds and easier access to fresh capital, an official said.

“What the industry wants is that you don’t get to pay the full fee for the amount of securities to be registered, it will be paid per tranche,” Justina Callangan, director of SEC’s Corporate Governance and Finance Department (CGFD) told reporters on the sidelines of a forum organized by The Asset magazine.

“The advantage is that when the market is good, you don’t have to run to the SEC to get your securities registered. You just have to update your prospectus,” she said.

The department will present the reform in the implementing rules of the Securities Regulation Code to the SEC en banc this week.

The shelf registration scheme has been implemented by the SEC since 2000. However, issuers of securities like stocks, bonds and mutual funds have to immediately pay the corresponding registration fee for the entire amount to be raised from the public.

“It was a disincentive,” Callangan said, adding that once a company registers a sizable amount like P10 billion, they have to sell everything in one go.

With the amendment, issuers will be able to register large amounts of securities but payment will be in tranches depending on the amount to be issued immediately, Callangan said.

“This is for companies that want to go into the market everytime the market improves,” she said.

Under the reform, issuers are allowed to register any amount of securities. The registration certificate will be valid for three years, Callangan said.

However, issuers should offer the securities in a three-year span. The fee for unissued securities will also have to be paid, Callangan said.