SEC likely to defer plan to require 20% public float

The Securities and Exchange Commission (SEC) may defer a plan to require existing listed companies to maintain a public ownership of at least 20 percent—double the existing minimum requirement—but companies that will conduct an initial public offering will have to comply with the new threshold.

In an interview with reporters on the sidelines of the

Shareholders Association of the Philippines (SharePHIL) forum yesterday, SEC Commissioner Ephryo Luis Amatong said the SEC may issue by late October or early November a new ruling on the minimum public ownership requirement for listed companies.

Public float refers to the portion of the issued and outstanding shares that are freely available and tradable in the market and are nonstrategic in nature or are not meant to gain substantial influence on how the company is managed.

“Our thinking is we will go forward with IPOs first to require the minimum float to 20 percent, but we’re still looking at how to address the remaining [companies],” Amatong said.

Of the 269 companies listed on the Philippine Stock Exchange, Amatong said many companies were not operating.

“So how do you increase the capital for the nonoperating companies? They have issues and their lawyers have raised issues,” Amatong said.

The increase in public float is meant to deepen the domestic capital market and raise the bar for corporate governance in the Philippines.

Based on the original timetable, companies that are already listed on an exchange but below the 20 percent threshold will be given three years to comply. They will be required to increase their public float to at least 15 percent on or before the end of 2018, and then to at least 20 percent on or before the end of 2020.