THE Philippine Stock Exchange (PSE) has been authorized to increase the maximum subscription amount for each local small investor to more than P100,000 on a case-to-case basis to correspond with the size of the share offering.

In a circular, the exchange announced that the Securities and Exchange Commission had approved the amendments to the rules for local small investors (LSIs), or those who are willing to subscribe to a minimum board lot and whose subscription does not exceed P100,000.

The authority given to the PSE to increase the maximum subscription amount is aimed at “facilitating and achieving maximum participation and subscription to the LSI allocation.”

The PSE said the allocation to LSIs will be at least 10% of the entire initial public offering (IPO), which will be offered only after the effectivity of the registration statement and during the formal offering period.

“In the event of an over or under subscription in the 10% offer, a ‘clawback’ or a ‘clawforward’ mechanism shall be implemented,” the PSE said, referring to a provision relating to the reallocation of the offer shares.

In a separate circular, the exchange also released amendments to listing rules for real estate investment trusts (REITs) relating to lock-up exemptions for REIT sponsors, as well as regarding the shareholder equity requirement.

“To enable a secondary offering of REIT shares during the IPO, even in cases where the actual issuance of REIT shares to the sponsors or promoters in exchange for their contributed properties at a price lower than the IPO price may take place within the 180-day period before the IPO due to pending regulatory approvals, such shares issued to sponsors or promoters shall be exempted from the application of the lock-up rule,” the PSE said.

An amendment was also introduced that states that a newly formed REIT is not prohibited from undertaking a secondary offering of shares during an IPO, among others.

In another circular, the PSE also announced amendments to the lock-up rule section for the main board and the small and medium enterprises (SME) board.

“The amended lock-up rule allows alternative investment funds (AIFs) or their investment vehicle with demonstrated track record in private equity investments to sell during the IPO the shares that they acquired within 180 days prior to the IPO at a price lower than the IPO price, subject to the conditions set out in the rules,” the exchange said.

An alternative investment fund is an investment vehicle established for the purpose of raising capital from different investors and investing the pooled funds in alternative investments such as private equity, venture capital, and real estate.

The circular also detailed specific guidelines for listings on the main board and the SME board, among other amendments. — Luisa Maria Jacinta C. Jocson