The old PSE trading floor in Ayala AFP PHOTO / Jay DIRECTO
The Philippine Stock Exchange (PSE) has weeded out the dormant stock brokers as part of efforts to comply with the 20-percent cap on bourse ownership by a single industry.
The PSE announced on Wednesday that this measure of removing inactive trading participants – together with the follow-on offering which would dilute the ownership of brokers – would allow the PSE to comply with the 20-percent ownership limit.
“The company has already revoked the status of, and declared vacant the trading rights of inactive trading participants, who are also shareholders, constituting about 2.34 percent of the total outstanding capital stock,” the PSE said.
“The SEC, on the other hand, is currently completing the process of revoking the registration of these shareholders if they will not amend their primary purposes to that of a non-broker business business.”
An upcoming stock rights offering, where the PSE will issue 11.5 million common shares to external investors, will reduce the brokers’ ownership to 22.05 percent. This figure includes the shares owned by brokers whose trading rights have been revoked by the PSE and which are undergoing administrative procedures with the SEC.
“After the SEC completes its process, the broker shareholders further go down to below 20 percent,” the PSE said.
“The company is confident that will the offer fully underwritten and the procedures already being implemented by the company and the SEC, this will be fully achieved.”
The PSE issued this statement after the Securities and Exchange Commission (SEC) called out the bourse for what the regulator described as an “inaccurate” and “misleading” statement on the reduction in brokers’ ownership in the exchange. The statement suggested that compliance to the 20-percent ownership ceiling has been finally achieved.
Trading on shares of PSE was halted from 10:19 a.m. until 1:30 p.m on Wednesday.
The PSE earlier announced it had signed an underwriting commitment with BDO Capital and First Metro Investments Corp. to launch the stock rights offering that would ensure compliance with the 20-percent mandatory cap on bourse ownership.