The Securities and Exchange Commission approved new rules requiring companies that plan to conduct an initial public offering to have a minimum public float of 20 percent to 33 percent, depending on market capitalization.
The approved guidelines said a company with market capitalization of P500 million should offer at least 33 percent of the outstanding capital stock to the public, while a firm with over P500 million up to P1 billion market capitalization should sell at least 25 percent of the outstanding capital stock.
It said a company with market capitalization of more than P1 billion should offer a minimum public float of 20 percent.
A company listing through an IPO must also maintain a public ownership of at least 20 percent at all times. It said a company that plans to list with the Philippine Stock Exchange by way of introduction or with no public offering is also required to have at least a 20-percent public float upon and after listing.
A company that is doing a backdoor listing is required to have at least a 20-percent public float upon and after listing.
The new guidelines will take effect immediately.
Prior to approval of the new guidelines, a company that would conduct an IPO should have a public float of at least 20 percent regardless of market capitalization.
Converge ICT Solutions Inc. has a pending IPO application with the corporate regulators.
Aside from increasing the public float requirement for newly-listed firms, the SEC is also studying plans to increase the minimum public ownership on existing listed firms.
Listed firms are presently required to maintain a minimum public float of 10 percent.
The SEC eyes a staggered increase in the public float requirement initially to 15 percent and again to 20 percent over a five-year period.