SEC approves PPP listing rules

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THE state-run corporate regulator Securities and Exchange Commission (SEC) has approved the Philippine Stock Exchange’s (PSE) rules on listing and disclosure of public-private partnership (PPP) companies, a year after the PPP listing idea was first proposed.

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The approved rules say a PPP company as a “special purpose company” incorporated by the awarded corporation, joint venture, or consortium, “shall then assume and accede to all rights and obligations in accordance with the amended BOT law and its implementing rules.”

“In support of President Duterte’s programs to sustain economic growth, listing PPP companies at the bourse will provide additional source of funding for PPP projects. The approved PPP rules allows the PPP companies to raise funds from the capital market,” the SEC said in a statement issued on Thursday.

Under the rule, a PPP company may apply for listing on the exchange even if it does not have the required 3-year track record and operating history, provided that the company complies with the general requirements set by the PSE Main Board Listing Rules.

Only PPP companies with a project costing at least P5 billion according to the financial bid will be allowed to list on the main board. Existing shareholders of the PPP company prior to listing will be prohibited from offering their shares—also known as secondary offering—during the initial public offering period.

When listed, the PPP company is required to submit a business plan to the PSE indicating its plans for liquidation and winding up, or a proposal for a new business, at least three years before the scheduled PPP contract expiration.

“The sanction for failure to submit the business plan has not been discussed or provided by the PSE. This could be clarified even after approval by the commission and before start of implementation,” SEC’s Market and Securities Regulation Department (MSRD) said.

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