The Philippine Stock Exchange (PSE) must now share information with the Philippine Competition Commission (PCC) on mergers and acquisitions (M&A) worth more than P1 billion.
The new development covers publicly listed companies (PLC).
In Memorandum Circular 16-002, the PCC mandates the PSE to provide the commission “a list of covered transactions” or M&A transactions to be reviewed. The commission also orders the exchange to establish “an information-sharing mechanism” in collecting details about M&As between PLCs.
The “covered transactions” to be reviewed by PCC are M&As exceeding P1 billion, involving one or more companies listed on the PSE. The disclosure must be made before the transaction is completed, and “to be consummated after the effectivity of this Memorandum Circular but before the effectivity of the implementing rules and regulations.
Under the Republic Act 10667 or the Philippine Competition Act (PCA), which formed the PCC, corporations engaged in M&As worth more than P1-billion must submit the full details of the transaction to the PCC.
Companies breaking the new rule will find the PCC employing Section 17 of RA 10667 which states that, “An agreement consummated in violation of this requirement to notify the commission shall be considered void and subject the parties to an administrative fine of 1 percent to 5 percent of the value of the transaction.”
MC 16-002 will take effect 15 days after its publication on February 16.
Chaired by former Socioeconomic Planning Secretary Arsenio Balisacan, the commission seeks to efficiency in market competition to provide a level-playing field among businesses.
It is mandated to protect consumer welfare and enrich domestic and international trade, as well as economic development.
The National Economic and Development Authority said the PCC will conduct inquiries and investigate all forms of anti-competitive agreements, abuse of dominant position and anti-competitive mergers and acquisitions.