Quantcast
Latest Stories

‘Safety valve’ eyed on foreign equity rule

By

THE PHILIPPINE Stock Exchange is proposing some “safety valve” mechanism to ensure compliance with foreign equity restrictions without discouraging capital flows within the regulatory framework being drawn up by the Securities and Exchange Commission.

The mechanism could be a depository receipt structure or some sort of quasi-debt/quasi-equity structure wherein voting shares could be minimal, PSE president Hans Sicat told reporters Thursday night.

“I think with the help of the SEC, we’ll end up with a logical solution,” Sicat said. “There’s a good discussion with the SEC on what to do and I think, hopefully, we’ll end up with a safety valve mechanism.”

The SEC has vowed to come up within the next six months with a “proactive, fair, reasonable and clear-cut” compliance framework on foreign capital computation amid concerns that an overly strict interpretation of a recent Supreme Court ruling on Philippine Long Distance Telephone Co. would set back local capital markets.

The draft circular earlier issued by the SEC on foreign equity limit compliance was seen affecting at least 13 percent of publicly listed companies.

“In any case, I think the SEC is responsive to the comments not just of the PSE but of the issuers and global investors. They realize that defining capital is not only very important but will be quite in line with the global trend of easing global flow (restrictions) and minimizing transactions costs,” Sicat said.

Acting on a petition filed by the late human rights lawyer Wilson Gamboa, the Supreme Court has ruled with finality that nonvoting shares do not count as equity when computing a company’s Filipino ownership level in compliance with the 40-percent foreign equity limit on key industries like properties and utilities.

The bone of contention was the legal interpretation of the 60-40 local-foreign ownership breakdown cited in the Oct. 9, 2012, ruling of the Supreme Court. The SEC’s first draft closely followed the provision in the latest SC issuance calling for the uniform application of the 60-40 requirement in favor of Filipino citizens to each class of shares, regardless of differences in voting rights, privileges and restrictions.


Follow Us


Follow us on Facebook Follow on Twitter Follow on Twitter


Recent Stories:

Complete stories on our Digital Edition newsstand for tablets, netbooks and mobile phones; 14-issue free trial. About to step out? Get breaking alerts on your mobile.phone. Text ON INQ BREAKING to 4467, for Globe, Smart and Sun subscribers in the Philippines.

Tags: Business , foreign equity rule , Securities and Exchange Commission



Copyright © 2014, .
To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.
Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:
c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City, Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94
Advertisement
Advertisement

News

  • US teacher fired over comment on black president
  • Magnitude-7.5 earthquake shakes Mexican capital
  • Title of new Hillary Clinton book: ‘Hard Choices’
  • Filipinos, Dutch re-enact crucifixion of Christ
  • 14 killed in car bombing in Homs
  • Sports

  • Nadal ousted by Ferrer in Monte Carlo quarters
  • Pacquiao shorts in Bradley fight sold for P1.7M in LA auction
  • Ryu pitches Dodgers past Giants
  • Alonso sets the pace in Chinese GP practice
  • Heat seek Three-peat but Spurs, Pacers top seeds
  • Lifestyle

  • Levine designs womenswear with help from fiancee
  • Gabriel Garcia Marquez, Nobel laureate, dies at 87
  • Ford Mustang turns 50 atop Empire State Building
  • Pro visual artists, lensmen to judge Pagcor’s photo contest
  • ‘Labahita a la bacalao’
  • Entertainment

  • Myx TV premieres Asian American ‘docu-series’
  • A nutty finale for ‘Scandal,’ TV’s craziest show
  • EXO postpones release of mini album ‘Overdose’
  • ‘X-men’ filmmaker slams ‘fabricated’ sex attack claims
  • Singer Chris Brown’s bodyguard on trial in DC
  • Business

  • US commerce secretary spells out economic facet of ‘pivot to Asia’
  • Italy sells luxury state cars on eBay
  • Asian shares mostly up in quiet trade
  • Dollar up in Asia on US jobs data, Ukraine deal
  • Barbie doll has a problem
  • Technology

  • Nasa’s moon-orbiting robot crashes down
  • Netizens pay respects to Gabriel Garcia Marquez
  • Nokia recalls 30,000 chargers for Lumia 2520 tablet
  • Facebook rolls out ‘nearby friends’ feature
  • Netizens seethe over Aquino’s ‘sacrifice’ message
  • Opinion

  • Editorial cartoon, April 17, 2014
  • A humbler Church
  • Deepest darkness
  • ‘Agnihotra’ for Earth’s health
  • It’s the Holy Week, time to think of others
  • Global Nation

  • Las Vegas ‘Pinoy Pride’ fest hails Filipino heritage
  • Marking Jesus’ journey on Good Friday
  • Filipina accomplice arrested for fake bills in Malaysia
  • DoH denies Filipino nurse no longer positive for MERS virus
  • WHO warns vs spread of MERS-Cov, urges vigilance in taking precautions
  • Marketplace