Direct listing of pref shares now allowed

No need for IPO

MANILA, Philippines — The direct listing of preferred shares as an alternative to traditional initial public offerings (IPOs) will now be allowed as part of the Philippine Stock Exchange Inc. (PSE)’s efforts to democratize access to the stock market.

The PSE said the amendments to its consolidated listing and disclosure rules, or the PSE rule on listing through initial public offering or direct listing of preferred shares, have been approved by the Securities and Exchange Commission.

As such, the PSE said the rules would take effect immediately.

Under the amended rules, issuers may either conduct an IPO or undertake direct listing of preferred shares.

A company may apply for listing through an offering or direct listing of preferred shares, without listing its common shares.

For issuers that will conduct an IPO, the minimum offer size is P100 million, and the minimum number of stockholders required upon listing is 100 stockholders.

This is lower than the previous minimum offer size requirement of P1 billion and the minimum number of stockholders required upon listing of 1,000 stockholders.

For issuers that will undertake direct listing, the rule indicates that listed preferred shares will become immediately tradable upon listing on the exchange, subject to the transfer restrictions.

To ensure eventual public participation, issuers utilizing the direct listing route must comply with the post-listing offering or sale requirement.

The disclosure obligations have likewise been limited to developments that affect or may affect the issuer’s ability to pay dividends.

The PSE said a modified penalty framework applies to issuers that list under the rules.