SEC to grant exemptive relief to winning bidder for PDS

By Arra B. Francia, Reporter

THE Securities and Exchange Commission (SEC) said on Friday it will only grant exemptive relief once it is clear if the Philippine Stock Exchange, Inc. (PSE) or Land Bank of the Philippines (Landbank) will acquire the Philippine Dealing Holding Systems Corp. (PDSHC).

“We will issue exemptive relief once everything is already clear on who will win the price war,” SEC Chairperson Teresita J. Herbosa told reporters at the sidelines of a forum on Friday.

Any entity looking to acquire PDSHC would have to secure exemptive relief from the SEC, as per the Securities Regulation Code that says no single group can own up to 20% of an exchange.

Ms. Herbosa said the competition between PSE and Landbank for PDSHC is more of a business issue at this point, given that it would depend on which party can bid higher.

“Acquisition should be for reasons to benefit the investing public… If it comes to that point where both PSE and Landbank will be applying to us, assuming also that they have the same go-signal from the owners of (PDSHC), we’ll have to probably consider these factors,” Ms. Herbosa said.

The PSE has been negotiating to acquire the fixed-income exchange for about four years now, since it proposed to merge the two capital markets back in 2013 to promote synergies in operations. So far, the PSE has been able to hike its stake in the PDSHC to 69.03%.

The bourse operator will also be conducting a P3.16-billion stock rights offer to eligible stockholders by March to bring down ownership of trading participants to less than 20% in the PSE. The funds raised will also be used for its acquisition of PDSHC, which is valued at P2.2 billion.

In January, Landbank bared its plan to acquire a majority stake in PDSHC, in a challenge to PSE’s bid.

Finance Secretary Carlo G. Dominguez III earlier said the PSE’s inability to merge with PDS has hampered the growth of the country’s capital markets. He has also expressed support for Landbank’s acquisition, saying it will be a profitable business for the government-owned bank.

While the PSE has a pending petition, Ms. Herbosa said Landbank has yet to file a petition for exemptive relief at the commission.