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By Krista A. M. Montealegre, Senior Reporter

PSE gets more time for PDS takeover

Posted on December 01, 2015

THE SECURITIES and Exchange Commission (SEC) has given the Philippine Stock Exchange, Inc. (PSE) two more weeks to complete regulatory requirements for its plan to consolidate the country’s equity and fixed-income exchanges, a PSE official confirmed yesterday.

To recall, the PSE failed to obtain last-minute approval from the SEC last Friday for its petition to own more than 20% of the fixed-income exchange. As a result, the PSE was unable to consummate the share purchase agreements (SPA) it signed with shareholders of PDS Holdings, Inc., possibly derailing its plan to form a single trading platform for stocks and fixed-income securities in the country.

PSE Chairman Jose T. Pardo confirmed in a mobile phone message information from a knowledgeable source over the weekend that the bourse received a 17-page letter from the SEC on Friday last week, giving the stock market operator 15 days to resolve issues weighing on its application to take over PDS.

“Yes, we did get a letter addressed to our president,” Mr. Pardo said, referring to Hans B. Sicat.

The bourse’s 15-man board of directors is scheduled to hold a special meeting today to discuss what to do next, Mr. Pardo said.

Asked to comment on PSE’s options, he replied: “I don’t want to preempt the board.”

Among the options that the PSE is considering is extending the SPAs with PDS shareholders should it fail to get SEC approval before the deadline, Mr. Sicat had said last Wednesday night.

After the 15-day period, the SEC will have up to 60 days -- taking into consideration the Christmas break and the complexity of the bourse’s filings -- to issue a decision on the PSE’s petition based on the latter’s final submission, said an industry source who spoke on the condition of anonymity.

SEC Chairperson Teresita J. Herbosa said on Nov. 11 that the corporate regulator was considering monopoly concerns before clearing the merger.

So far, the PSE has signed SPAs with the Bankers Association of the Philippines; Finex Research and Development Foundation, Inc.; Whistler Technology Services, Inc. and Insular Investment Corp.

The four shareholders own a cumulative 40.06% stake in PDS, the holding company that owns the country’s sole fixed-income trading platform Philippine Dealing and Exchange Corp. (PDEx).

The PSE holds 20.98%.

The PSE had earlier secured the commitments of other PDS minority shareholders, namely: San Miguel Corp. (4%) and Golden Astra Capital (0.36%) for the sale of their stake, but formal agreements have yet to be signed.

The PDS’ other stockholders include Singapore Exchange (20%); Computershare Technology Services (8%); Tata Consultancy Services Asia (8%) and The Philippine American Life and General Insurance Co. (4%).