SEC urged to revive proposal to increase minimum public float

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By Denise A. Valdez
Reporter

THE Philippine Stock Exchange (PSE) is urging the Securities and Exchange Commission (SEC) to pursue its plan to raise the minimum public ownership (MPO) requirement for listed firms.

Ramon S. Monzon, president and chief executive officer of the local bourse operator, told reporters over the weekend that he is set to meet with the SEC on Wednesday to discuss the MPO hike plan.

“We’re pushing them to (do it). Two to three years ago, they came up with the draft circular increasing the MPO to 20%. Nawala na lang bigla [But it disappeared]. Sabi namin [We said], we want them to pursue that. We’re supporting that,” Mr. Monzon said.

The SEC had been planning to raise the MPO for publicly listed companies to 20% since 2017, double the 10% MPO requirement which has been in place starting 2011.




But the change in rules two years ago was limited to companies conducting an initial public offering. The MPO for listed companies remained at the 10% level.

SEC Commissioner Ephyro Luis B. Amatong said in August the plan now is to require a 20-25% MPO for publicly listed firms, higher than the 15-20% it was targeting earlier, which companies would have to comply with within five years.

Under this current plan, companies will be allowed to submit their own timetable in complying with the minimum public float adjustment.

There are 266 listed firms at the PSE before Monday, and the SEC said 68 of these would be affected by the MPO policy change once it is implemented. The PSE had also said earlier that the bulk of the listed firms already have a public float of between 45-47%.

Of the 30-member PSE index, only four companies will have to adjust: Aboitiz Power Corp. which has a public float of 19.15%; Globe Telecom, Inc. with 21.65%; Manila Electric Co. with 20.98%; and San Miguel Corp. with 15.94%.

The SEC had said adjusting the MPO is seen to improve market efficiency as the increased liquidity would help reduce market volatility, lower the chances of price manipulation and overall encourage good corporate governance.

Mr. Monzon also commented on the SEC’s release of regulatory adjustments for real estate investment trusts (REITs) on Friday. He said with the MPO reduction to 33% within the first year from 40% in the previous rules, the PSE hopes to see at least one REIT listing before the year ends.

“Finally, the SEC revealed the draft rules. They did some amendment, nilabas na nila [it was already released] for public comment. Hopefully that should come out by this month, October,” he said.

The government sought to encourage REIT listings since 2009 when the REIT Act was signed, but not a single REIT has been launched in the country in the past 10 years.

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