PSE sets changes in trading and listing rules

Published July 29, 2021, 4:02 PM

by James A. Loyola

While it already expects record high listing activities this year, the Philippine Stock Exchange is preparing to launch new rules and products that will further stir up trading at the local bourse.

During the PSE’s Mid-Year Stock Market Briefing, PSE President Ramon S. Monzon said plans include the liberalization of listing requirements such as the easing of listing standards for SMEs, allowing preferred shares-only listing, and the easing of the lock-up rule.

The bourse is also targeting to finally be able to allow short selling later this year as well as the launch of the PSE’s new mid-cap and high dividend indices.

On the technology side, also later this year, the PSE plans to launch its own data analytics platform as well as expand the PSE EASy platform to allow small investors to subscribe to stock rights offerings, follow-on offerings, and retail treasury bonds in addition to initial public offerings.

PSE President Ramon S. Monzon

The PSE also aims to go live with its new clearing and settlement system by the first quarter next year which will shorten the settlement cycle to T+2 (day traded plus two trading days) from the current T+3.

Monzon said that, for SME listings, they will introduce the sponsor model which will allow the listing of SMEs backed by a listed company. The PSE will also provide COVID-19 considerations for listing applicants.

Meanwhile, the PSE is proposing to come out with rules to allow firms to tap the stock market by offering preferred shares even if their common shares are not listed.

“This will provide issuers with flexibility on their fundraising structure while providing the public the opportunity to participate in the economic benefits as shareholders,” Monzon explained.

The bourse is also proposing amendments to its Lock-up Rule in the Main and SME boards to provide an exit mechanism for alternative investment funds or their investment arms.

Monzon said they expect to complete all regulatory approvals such as for offshore collateral and securities lending to finally allow short selling in the bourse which is seen to generate more trading activity.