SEC approves new PSE listing board scheme

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The Securities and Exchange Commission (SEC) has given its go-signal to the local bourse to implement the new listing board scheme, which would involve only two boards instead of three.

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Under the new structure, there would only be two listing boards—the Small, Medium and Emerging (SME) board and the Main Board— replacing the old three listing board structure which is composed of the First Board, Second Board, and the Small and Medium Enterprise Board.

In the new rule, companies that will list on the Main Board must have an authorized capital stock of at least P500 million, and at least three years of operating history.

These companies should also have cumulative earnings before income tax, depreciation and amortization of at least P50 million for the last three years prior to listing, and positive stockholders’ equity for the immediately preceding fiscal year.

Meanwhile, a company applying for listing on the new SME Board must have an authorized capital stock of P100 million or more, of which a minimum of 25 percent must be subscribed and fully paid.

The other salient features of the new rules for companies applying to list in the SME Board are its track record, five-year business plan requirement, and more stringent lock-up requirements.

In stringent lock-up requirements, the shares of existing stockholders who beneficially own at least 10 percent of the issued and outstanding shares of the applicant company will be locked up for a period of two years from listing.

This means that covered shareholders cannot sell or dispose of their securities during the lock-up period.

The proposed rules also prohibit a secondary offering during an initial public offering, and the company is prohibited from changing its primary business purpose for a period of seven years from listing.

“The new rules should help raise the profile of publicly listed companies by putting in place requirements that will further show the viability of the companies listing in the exchange. The new features of these rules should, in the process, also help promote investor protection,” said Hans Sicat, PSE president and chief executive officer.

Madelaine B. Miraflor

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