THE PHILIPPINE Stock Exchange, Inc. (PSE) has published supplemental listing and disclosure rules for public-private partnerships (PPPs) undertaking infrastructure projects worth at least P5 billion, easing the track record requirement that otherwise applies to those seeking to join the bourse’s Main Board.

In a Dec. 8 memorandum, the bourse released the rules reflecting minor revisions required by the Securities and Exchange Commission (SEC) when it approved the guidelines in an en banc meeting on Nov. 8.

“We are excited about this new product, especially as government has committed to accelerate infrastructure spending,” PSE President and Chief Executive Officer Hans B. Sicat said in a statement issued on Monday.

“We hope that PPP companies will now consider the equities market as an avenue for their capital raising activities.”

The approved rules will allow companies with PPP contracts worth at least P5 billion to debut on the equities market upon commencing commercial operations or completing construction work or a phase of the project.

The supplemental rules effectively relaxed the exchange’s standing listing guidelines by waiving the minimum three-year track record and operating history required of companies seeking to join the PSE Main Board, among others.

At the same time, however, the bourse bars the principal shareholders of a listed PPP company from selling, assigning or disposing of their shares in any manner a year from the initial listing date.

Moreover, secondary offering is prohibited during the initial public offering period.

Also, a listed PPP company must submit to PSE a business plan, which may include plans for liquidation and winding up or a proposal for a new business plan, at least three years before the scheduled expiration of the PPP contract.

When it approved the supplemental rules, the SEC identified certain revisions mostly pertaining to the language of some provisions.

The major changes involved the setting of standards and guidelines for delisting, including “disputes” among grounds for delisting and specifying sanctions for failure to submit a required business plan.

In the final version of the supplemental rules, the PSE adopted the grounds and procedure for involuntary delisting outlined in the standing PSE Delisting Rules and other relevant rules and policies of the bourse.

The PSE also adopted the penalties and fines determined for violation of the PSE Listing and Disclosure Rules as sanctions for failure to submit the required business plan.

“We believe that infrastructure development is critical in enhancing productivity and efficiency of various sectors of the economy,” Mr. Sicat said.

“With these rules, we hope the PSE is able to contribute to the goal of sustaining the growth trajectory of the country.”

The listing of infrastructure projects is practiced in other Asian markets, such as Bursa Malaysia, Hong Kong Exchanges and Clearing Ltd., Japan Exchange Group, Stock Exchange of Thailand and Taiwan Stock Exchange.

Mr. Sicat noted that “2016 is turning out to be a good year for our product development initiative.”

“We still need to do a lot more to catch up with our peers in the region and we hope with the cooperation and help of all stakeholders, we can get closer to our vision of becoming a world-class exchange.”

13 December 2016
By Keith Richard D. Mariano