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Plan to raise minimum public float deferred

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THE Securities and Exchange Commission (SEC) is deferring its plan to raise the minimum public ownership (MPO) of publicly listed companies, as it bids for more time to study the increase.

SEC Chairperson Emilio B. Aquino said the commission will have strategic planning (strat plan) sessions starting this month to map out its priorities and key focus areas until 2025, which will include raising the public float of listed firms.

“We’re having a strat plan. We want to really develop the capital market… We are studying it and still working on it,” Mr. Aquino told reporters after a media event last week.

Mr. Aquino declined to give a definite timeline on when they will push through with the plan.

The country’s corporate regulator earlier said it will initially increase MPO of listed firms to 15% of their issued and outstanding shares, until it reaches the target level of 20%. This is double the current MPO of 10%, which has been in place since 2011.

However, the SEC was forced to delay the increase due to market volatility at the Philippine Stock Exchange last year. The local bourse had quickly plunged from its record high of 9,058.62 on Jan. 29, 2018 back to the 7,400 level by the end of the year.




The SEC has already implemented the stricter requirement on companies who want to conduct an initial public offering since November 2017. When the rule was released, the commission said 68 out of 264 publicly listed firms had a public float lower than 20%. Only 39 of these firms have an MPO of less than 15%.

SEC Commissioner Ephyro Luis B. Amatong earlier said they may provide a five-year compliance period once the rules on higher public float requirement are released. This will give firms enough time to meet the rule despite market volatility.

Aside from the higher public float requirement, the SEC has also been formulating rules to introduce more financial products in the country. It is currently finalizing the guidelines for initial coin offerings (ICO), which seeks to regulate startups or companies who want to raise money through the issuance of coins or tokens.

The SEC is also drafting rules for virtual currency exchanges to complement the rules for ICOs. This will give investors the platform to trade their virtual currency or digital money into fiat currency, and vice versa.

The commission is also set to release the revised guidelines for real estate investment trusts within the year, after it has ironed out the requests of the Department of Finance and Bureau of Internal Revenue to ensure that the money raised through such products will be reinvested in the country. — Arra B. Francia