A UNIT of the Philippine Stock Exchange, Inc. (PSE) is investing P200 million for a new clearing and settlement system.

In a disclosure posted Friday, the PSE said its wholly owned unit Securities Clearing Corporation of the Philippines’ (SCCP) board of directors has approved the issuance of two million shares worth P200 million from the unissued portion of its authorized capital stock to the company.

“SCCP will use the investment to partially fund the purchase of a new clearing and settlement system,” the PSE said.

The PSE also said it will settle its unpaid subscription worth P50 million.

SCCP acts as the central securities clearing institution in the country, managing and supporting the clearance of trades in securities at the PSE and other official securities markets.

In a separate disclosure, the PSE said SCCP has also declared additional cash dividends worth P145 million to stockholders as of Sept. 19. The dividends will be distributed on Oct. 2.

Earlier last week, the stock exchange disclosed that it has secured approval from the Securities and Exchange Commission (SEC) for changes in its authorized capital stock, which will now consist of 106 million common shares with a par value of P1 each plus 14 million preferred shares worth P14 million.

The preferred shares will have voting rights, be cumulative in the payment of dividends, be excluded in any further dividends, and cannot be converted into common shares.

The shares may also be redeemed at the option of the board after its fifth anniversary.

Meanwhile, the PSE has yet to obtain the SEC’s approval for the creation of 3.5 million non-voting preferred shares. This is part of the bourse operator’s plan to reduce broker ownership in the company to less than 20%, as per the Securities Regulation Code.

The PSE said last March that its broker ownership stood at 26.44%, higher than the 20% industry limit.

With this, the preferred shares may only be issued to brokers. They will be non-voting, non-participating in any further dividends, non-convertible, and can be redeemed at the board’s discretion on its third anniversary date.

The PSE’s net income attributable to the parent surged 57% to P290.33 million in the first half of 2019, amid a 13% decline in gross revenues to P605.24 million. — Arra B. Francia