FMIC to offer, list P1B exchange traded funds

MANILA, Philippines–The Metrobank group’s First Metro Investment Corp. seeks to be the first institution to roll out exchange traded funds (ETFs) in the country with the targeted offering of P1 billion worth of shares of a pioneering fund that will debut on the local stock exchange by September.

This developed as market experts and regulators are set to convene on Tuesday to work on the introduction of ETFs in the Philippines, one of the last markets in the region to open up to this fast-growing asset class.

For its part, FMIC has officially filed for the listing of the country’s first ETF with the Philippine Stock Exchange and the Securities and Exchange Commission.  It will be known as First Metro Philippine Equity Exchange Traded Fund.

Citing the registration statement filed with the securities regulators,  First Metro ETF will register its entire authorized capital stock of P3 billion and offer up to P1 billion of the ETF shares, FMIC president Roberto Juanchito Dispo said in a press statement.

“The ETF, which is intrinsically a mutual fund except that it will be listed and traded like any stock at the local bourse for added liquidity will track the performance of the Philippine Stock Exchange index, the benchmark for the Philippine stock market.

The ETF will allow investors to enjoy the benefits of owning a select number of stocks by buying the listed shares of the ETF,” said Dispo.

FMIC will act as the fund sponsor while First Metro Asset Management, Inc. will be the fund manager. The market maker is First Metro’s brokerage arm, First Metro Securities Brokerage Corp., which will also act as authorized participant together with IGC Securities.

The target listing of FMIC’s ETF on the local stock exchange is on the fourth week of September.

ETFs are seen to offer several advantages and investment options to investors including liquidity especially for those who cannot directly access specific sectors in the market due to a country’s specific regulatory environment.  Another advantage is the lower administrative cost compared to other collective investment schemes.

Meanwhile, the PSE, together with Singapore-based The Pinnacle Group International, will hold the “Philippine ETF Investment Convention” on Tuesday July 30, at the Hotel Intercontinental Manila in Makati City.

The whole-day event has a lineup of foreign ETF experts who will share their experiences, knowledge and best practices on ETF.

National Treasurer Rosalia De Leon is set to deliver the keynote address while PSE president Hans Sicat, PSE chief operating officer Roel Refran and Securities and Exchange Commission Commissioner Juanita Cueto are set to talk about regulations and listing procedures.

FMIC’s Dispo is also one of the speakers who will discuss their experience in listing the country’s first ETF.

Last month, the SEC approved the final set of guidelines that will allow the launching of ETFs.  The proposed ETF listing rules, governed by the general ETF guidelines issued by SEC in October, provides for transparency and investor safeguards that adhere to the International Organization of Securities Commissions and best practices in other jurisdictions.