PSE issues rules on trading dollar-denominated securities

The Philippine Stock Exchange has issued the rules creating a pioneering window for trading dollar-denominated securities (DDS) in line with its goal of diversifying product offering.

The rules – which can be downloaded at the PSE website – provide the framework and guidelines for the listing, trading and clearing and settlement of securities that will be issued in dollar denomination.

“With the newly-approved DDS rules duly signed by the Securities and Exchange Commission (SEC), our goal is to provide a new investment product that both our issuers and investors can leverage on to address their expanding requirements. We are grateful for the collective support of the SEC (Securities and Exchange Commission), the BSP (Bangko Sentral ng Pilipinas) and all the stakeholders in helping develop these rules, ” PSE president Hans Sicat said on Wednesday.

The DDS rules allow PSE listed companies to issue a new set of securities – either common or preferred shares – which are quoted, traded, and settled in US dollars. This will provide listed companies the venue to raise new capital in US dollars to meet their dollar needs. It also gives investors with dollar holdings an investment vehicle that could provide viable returns.

Among the companies long waiting for the DDS rules is food conglomerate Del Monte Pacific Ltd., which intends to issue up to $360 million in US-dollar denominated perpetual preferred shares in the Philippine capital market. The group expects to launch the offering early next year subject to regulatory approvals and market conditions. The initial tranche is intended at $250 million, with the balance proposed to be issued within three years.

While the SEC has approved the DDS rules, its implementation will be rolled out once the necessary infrastructure for the listing, trading and clearing and settlement are put in place. Related to this, the PSE has scheduled seminars and information awareness campaign for trading participants and other stakeholders this December.

“We shall be working on preparing the market and infrastructure over the next four to six weeks to ensure the smooth and successful introduction of DDS. Being a new product, it is important for the PSE that all stakeholders are properly informed of the dynamics of DDS,” Sicat said.