Decision on PSE-PDEx merger out Tuesday

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The Securities and Exchange Commission (SEC) is expected to issue a decision on Tuesday regarding the proposed merger between the Philippine Stock Exchange and bond market operator PDS Holdings Inc.

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In a chance interview, SEC Associate Commissioner Ephyro Luis Amatong told reporters that the commission en banc did not tackle the matter last Thursday.

“There were a lot of issues that we talked about during Tuesday’s en banc meeting, especially so that the SEC has been closely cooperating with the Senate investigation on the alleged money-laundering issue,” Amatong said.

“But this coming Tuesday, the PSE-PDEx merger will be the main priority on our agenda,” he added.

Amatong earlier said the SEC intended to come up with a decision before the holy week, although it has until March 26 to resolve the matter.

Because of supervening events, such as the investment scam that allegedly involved a dismissed PSE employee, Jose Cecilio “Jay” Penaflor and the RCBC money-laundering investigation at the Senate, the SEC decided to put the PSE-PDEx merger on the side.

“Once we arrive at our decision, we will let you know and we will thoroughly explain our decision,” Amatong said.

Should the SEC allow the PSE to acquire a majority stake in PDS Holdings, this would mean the merger between the two platforms, equities and fixed-yield markets, is in place.

Under the proposed merger, the PSE will be the surviving entity.

Amatong earlier said that the main issue that needs to be answered in arriving at its decision is: “‘Are the Philippine capital markets better off with the two exchanges integrated or are they better off apart?’”

“To answer this question, we have to run scenarios. Among the things that are being considered is, ‘Which is more favorable to capital market development?’” he said.

Amatong emphasized that the non-negotiable guideline for the decision is anchored on whether to do so would result in better services, both to the investors and issuers of bonds and equities.

“There are advantages—lower cost, making the exchanges more efficient. If you combine them, would they be able to provide better services, if not, why would we combine them? What’s in it for us anyway?” the commissioner added.

Since 2014, the PSE has been working on a P2.25-billion acquisition to own a majority of PDS Holdings but failed to secure regulatory approval last year as the SEC wanted to resolve several questions, particularly how the PSE would run the merged entity.

The PSE submitted its proposed business plan to the SEC last January 26.

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