Companies that plan to conduct an initial public offering next year are required to sell at least 15 percent of their shares to the public, the Securities and Exchange Commission said over the weekend.
SEC chairperson Teresita Herbosa said in an interview the corporate regulator would start imposing the 15 percent minimum public float on companies planning to conduct an initial public offering by January 2017. The minimum public float requirement currently stands at 10 percent.
“I will still probably be imposing that by Jan. 1, 2017″•the 15 percent public float for IPOs,” Herbosa said.
The move to impose a 15-percent minimum public float requirement on prospective IPO firms is in line with the SEC’s thrust to gradually increase the public ownership of listed firms to 25 percent.
The SEC earlier planned to implement the 15-percent minimum public ownership rule for IPOs this year. However, the recent elections and the entry of the new administration affected the schedule of implementing the stricter requirement.
Meanwhile, the SEC said it would ask the Finance Department’s stance on adjusting the public ownership requirement for real estate investment trust firms to 33 percent to attract potential REIT issuers to list with the Philippine Stock Exchange.
Herbosa said one remaining issue was the removal of the tax on the transfer of assets.
“We have a study which shows VAT [value added tax] removal will not affect the revenues that the government can collect from the earnings of the REIT,” Herbosa said.
She said several foreign funds were interested in investing in prospective Philippine REIT companies.
Herbosa said she recently met with foreign funds who were interested in investing in REIT companies in country because of the strong cash-flow of the prospective REIT issuers and the overall positive outlook on the economy.
Herbosa said on the planned merger of the equities and bond exchanges, the SEC was still waiting for the PSE to submit a new proposal.
She said if the PSE was able to submit the new proposal by Nov. 15, the SEC may be able to rule on it before the end of 2016.
The PSE said in August it planned to resubmit a proposal for the unification of the two exchanges to expand its platform of products and services and compete with regional players.
Herbosa said the SEC had not yet received any update from the PSE regarding the proposal.