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By Likha C. Cuevas-Miel, Reporter
THE Philippine Stock Exchange (PSE) said it is
studying the possibility of combining the small and medium
enterprise (SME) and second boards, both of which have lower
capitalization requirements compared with that of the first board.
In a briefing, Francis E. Lim, PSE president and
chief executive, said the board is ready to draft the rules that
will govern the listing of companies that do not qualify under the
first board, which then will be renamed as “Pearl” or
“Rapid” board. “But we have to resolve the policy issues
first,” he said.
Under the local bourse’s listing rules,
applicants for the second board should have at least P100 million in
authorized capital stock and a minimum subscription and paid up
capital of P25 million. Those interested in the SME board should
have at least P20 million in authorized capital stock. To qualify
for the SME board, an applicant should also have at least 25 percent
of its total capitalization as its subscription and paid up capital.
The SME board, unlike the second board, also
requires an applicant to have at least P5 million in tangible
assets, except for information technology firms.
The PSE president said the local bourse still
has to determine what would happen to the listed companies that may
not reach the minimum capitalization requirements as a result of
combining the two boards. As such, Lim doubts whether the merger
would push through this year.
Other differences in requirements between the
two boards pertain to track records. An applicant for the SME board
should have at least one year of positive net operating income prior
to listing. An applicant for the second board, on the other hand, is
not required to enjoy the same status, but must “demonstrate a
potential for superior growth, through the submission of statement
of active business pursuits and objectives.”
Last month, the PSE finalized its rules for the
listing of exchange-traded funds (ETF), which would be added to the
products and services it can offer the investing public.
An ETF is traded like stocks of a company and
tracks the price and yield performance of its underlying index or
portfolio and can be categorized as broad market, sector or
industry, single/multiple country/region. According to the PSE,
there are over 1,000 ETFs traded in over 40 stock markets abroad and
these instruments have assets valued at least $700 billion. None of
those funds however is listed at the local bourse.
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