The Securities and Exchange Commission (SEC) has ordered all listed companies to stop classifying common shares into Class A and Class B, a system originally designed to enforce foreign ownership limits.
It issued SEC Memorandum Circular (MC) No. 10, Series of 2025, on Aug. 7, 2025 to repeal a 1973 rule that permitted the trading of “B” shares on the regular board and required buyers to accept either “B” or “A” certificates.
The original rule was meant to enforce the 40-percent limit on foreign ownership of shares. Under the system, Class A shares were reserved for Filipino citizens, while Class B shares could be owned by both Filipinos and foreigners.
The SEC said the classification had led to price differences between the two share classes and created administrative problems for trading participants and the Securities Clearing Corporation of the Philippines. Advances in the Philippine Stock Exchange’s trading system now allow for the accurate monitoring of foreign ownership, making the old classification system unnecessary.
“To ensure efficiency in executing and settling equity trades, the classification of common shares into Class A and Class B of all listed companies shall be discontinued,” the SEC said in the circular.
The directive applies to all listed companies, including the 10 with existing A and B shares: Concrete Aggregates Corp., Filsyn Corp., Asia Amalgamated Corp., ATN Holdings, FJ Prince, Metro Alliance Holdings and Equities Corp., Benguet Corp., Lepanto Consolidated Mining, Manila Manila and Oriental Petroleum Minerals Corp.
Under the circular, companies with Class A and B shares should amend their articles of incorporation (AOI) within one year from the effective date of the rules to reflect the declassification.
During the transition period, buyers should still accept the specific class of shares they purchased. If a transaction causes a foreign investor to exceed the ownership limit, the investor, through their broker, must immediately sell the excess shares at market price.
If the breach is discovered during trading hours, the excess shares should be sold the same day. Otherwise, they must be sold at the opening of the next trading day. The proceeds will be returned to the foreign investor.
Violations of the circular will be penalized under Section 54 of the Securities Regulation Code, following due notice and hearing.
 in the Philippines is discontinuing the classification of common shares into Class A and Class B, a decades-old system used to monitor foreign ownership. The move aims to resolve price discrepancies and administrative issues.){kind=link}