IF the public ownership reports (PORs) and the lists of top 100 stockholders are not reliable filings to provide the public with the identities of the majority stockholders of listed companies, what can investors possibly trust to give them accurate ownership profiles of listed companies?
The public must learn the tricks of reading disclosures posted on the website of the Philippine Stock Exchange. Perhaps, they can browse for leads on the ownership details that listed companies disclose in their preliminary information statements (PIS) and definitive information statements (DIS).
However, the PIS and DIS do not always directly name the stockholders, but only suggest their holdings through PCD Nominee Corp. PCD lists in separate postings the identities of Filipino and non-Filipino stockholders.
Again, PCD Nominee does not list the beneficial stockholders. In a number of instances, it limits the information to the number of shares held by various stockbrokers or trading participants, either for themselves or for their beneficial owners.
Anyone would be lucky if he or she found a “statement of changes in beneficial ownership” that disclosed either the acquisition or sale of listed shares by one of the majority stockholders.
Of course, there is also the general information sheet (GIS), which listed and non-listed companies submit to the Securities and Exchange Commission (SEC). It is also posted on the PSE website for perusal by the public.
The public may also find something missing from a GIS in case of listed companies. They may be reading not the beneficial owners but the same “PCD Nominee” that the list of the top 100 stockholders also provides the public.
The big problem with the GIS is the way SEC officials impose it as a regulatory requirement. It is unfortunate that they tolerate the submission of a GIS that contains PCD Nominee as an entry for Filipino and non-Filipino stockholders.
A GIS is such an important document that must provide the public with information not only about the holdings of the majority stockholders but also about the ownership of significant stockholders and their relationships with the owners.
By the way, the full disclosure rule should also cover information about foreign subsidiaries of listed companies that are among the top 100 stockholders.
Nobody trades big unless he or she knows something big is about to happen.
Take a closer look at special block sales reported in the daily stock market reports. If the public were to scrutinize these trades, they would notice something missing that even SEC officials may have failed to appreciate.
Special block sales used to be reported to the SEC. If they are still required for disclosure as part of the market’s full transparency policy, then market regulators should review the rules.
For a change, why not require the identities of both sellers and buyers? As has been the practice, only the buyers are named in special block sales in filings with the SEC before the trades are consummated.
No need to worry about SEC insiders. They are not allowed to trade on listed stocks.
It is not enough that regulatory authorities are informed about huge trades. There must be a reason or reasons for either buy or sell orders to be reported to the SEC and PSE, and, at the same time, be posted on the PSE website. Is this difficult to impose on the stock market? Just asking.