PSE revives merger plans with PDS

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THE Philippine Stock Exchange (PSE) is reviving its plan to acquire a majority stake in the Philippine Dealing System Holdings Corp. (PDS) early next year and has notified the Securities and Exchange Commission (SEC).

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SEC Commissioner Ephyro Luis Amatong told reporters that PSE officials presented their plan last Wednesday. The PSE is again in talks with key stakeholders of the PDS.

“They presented their initial plan to us. It’s still very, very broad. They presented a compliance plan with the public ownership requirement as well as the state of their negotiations. They are still renegotiating with the key stakeholders,” Amatong said.

“They plan to submit to us again an update, likely in third week of January. They have to complete first some of the negotiations with the key stakeholders before they can give a more definitive submission,” he added.

The SEC has already rejected the PSE’s request for an exemptive relief from the 20-percent ownership limits by any entity in an exchange. Under corporate rules, a single entity can only own up to 20 percent of an exchange.

The PSE now owns 20 percent of PDS, the holding company for fixed-income trading platforms Philippine Dealing and Exchange Corp. (PDEx), Philippine Depository and Trust Corp. (PDTC) and Philippine Securities Settlement Corp.

Once the PSE submits a definitive plan next month, Amatong said the SEC intends to respond within the first quarter of 2017.

“We are still talking about the timelines. But depending on what the submissions are, we hope within the first quarter,” Amatong noted.

“All are still under negotiation. That’s why we still can’t determine the exact form, whether it will be a merger or not. We discussed—among us in the SEC—the situation, and it will be depending on how the negotiations will go,” the commissioner said.

“They will still apply for exemptive relief because you cannot acquire more than 20 percent in any exchange without exemptive relief . . . But it is much, much better now. So far, our initial feedback is okay,” he added.

PSE President Hans B. Sicat is positive about PSE-PDS merger, telling reporters that the exchange is brewing something substantial for the plan which will be announce before 2016 ends.

When the PSE first tried to acquire the PDS last year, the exchange was keen on buying out all its stakeholders.
It has forged selling agreements with the Bankers Association of the Philippines (BAP) for a 28.9-percent stake in PDS, and various minority shareholders who own a combined 31.1 percent of PDS.

But PSE has yet to secure a deal with the Singapore Exchange Limited (SGX) for its 20-percent stake in PDS.

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