PSE asked to clarify PDS deal by Jan.26

THE SECURITIES and Exchange Commission has given the Philippine Stock Exchange about a month more to clear up issues on its P2.25-billion proposed acquisition of the Philippine Dealing Systems Holdings Corp. (PDS group).

The PSE is set to buy out other shareholders in PDS Group – the holding firm for fixed-income trading platform Philippine Dealing and Exchange Corp. (PDEx), Philippine Depositary and Trust Corp. (PDTC) and Philippine Securities Settlement Corp. – to pave the way for the consolidation of local capital market infastructure. However, the closure of the deal hinges on the SEC’s approval of exemptive relief from the 20 percent limit on ownership by the PSE of such a unified capital market structure.

In a press statement, the PSE said it remained hopeful that its request for exemptive relief to own at least two-thirds of PDS would be approved.

The PSE said it’s currently working on providing the SEC with additional information on its exemptive relief application. The SEC has given the PSE until January 26, 2016 to clarify certain items about the PDS deal.

“We hope that the additional requirements we will provide will be sufficient basis for the SEC to approve our request to pursue this landmark transaction,” said PSE president and chief executive officer Hans B. Sicat.

The PSE submitted its application for exemptive relief to the SEC in April 2015.

The commercial aspect of the transaction has been completed and agreed with various shareholders of PDS but the agreements signed by the parties remain subject to regulatory approvals.

“We are looking forward to a favorable action by the SEC so that we can be a step closer to completing the PDS deal. We believe that unifying both exchanges will make our capital market more competitive in the region,” Sicat said.

The PSE earlier signed a share purchase agreement with the BAP and other shareholders, effectively raising the PSE’s stake in PDS to more than 67 percent but subject to closing conditions. The exemptive relief from the SEC was cited as the “single, most critical item” that remains unresolved.