SEC eases rules for energy IPOs

MANILA, Philippines  -The Securities and Exchange Commission (SEC) is making initial public offerings (IPOs) easier for power generation companies and distribution utilities.

With the introduction of SEC Memorandum Circular No. 4, Series of 2024, the corporate regulator said it was streamlining the registration process for energy firms seeking to raise money through the public offering of securities.

Known as Securing and Expanding Capital for PowerGen Operators and Wholesale Electricity and Retail Services, or SEC Powers, the initiative will complement the requirements for power generation companies and distribution utilities to sell at least 15 percent of their shares to the public.

This move is aimed at boosting the inflow of private capital and expanding the ownership base in the power sector.

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Under the rules, the SEC said its Markets and Securities Regulation Department (MSRD) will complete the review of the registration statement within 45 days from filing, in accordance with the requirements of Republic Act No. 8799, or the Securities Regulation Code (SRC); Republic Act No. 11232, or the Revised Corporation Code of the Philippines; and pertinent issuances of the SEC.

Minimum public float rule waiver

“Upon favorable consideration by the Commission En Banc of the registration statement, the MSRD shall issue a pre-effective letter stating the conditions to be complied with,” the SEC said. Order of registration

“Upon complying with the conditions, the MSRD shall issue the order of registration and/or permit to sell securities to the public. The public offering and sale of the securities may then commence within 10 business days from the date of the effectivity of the registration statement,” it added.

The SEC also waived the minimum public float requirement of 20 percent for listed companies in favor of a more lenient 15-percent minimum requirement as mandated by the Electric Power Industry Reform Act of 2001.

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A registrant can also avoid hiring an underwriter if it can show proof that it has the ability to sell all or substantially of its securities to the public.

“A power generation company or distribution utility company may also issue securities in tranches, to be offered on a continuous or delayed basis for a period not exceeding three years from the effective date of its initial shelf registration statement,” the SEC added.