SEC ‘firm’ on 20% public float requirement

Securities and Exchange Commission (SEC) Headquarters in Makati. The regulator says it will stick to the 20-percent minimum public float requirement for firms that want to list on the stock exchange. | PHOTO: Daniella Agacer / INQUIRER.net

MANILA, Philippines – The Securities and Exchange Commission (SEC) is “firm” in implementing the 20-percent minimum public float requirement for companies wishing to list on the local bourse amid reports that it had approved a proposal to slash this level.

In a statement on Thursday, the regulator said the existing minimum public ownership requirement “plays a crucial role in improving price discovery and reducing opportunities for price manipulation.”

READ: PSE okays 15% float for firms going public

“The [SEC] remains firm on the 20-percent minimum public float requirement for companies applying for an initial public offering (IPO), especially given the value of higher public ownership to market depth and efficiency,” the SEC said.

“The float requirement also seeks to reduce ownership concentration and encourage good corporate governance, ultimately strengthening the Philippine capital market,” it added.

This comes after Philippine Stock Exchange (PSE) president Ramon Monzon confirmed to reporters that the SEC had approved its proposal to reduce the minimum float to 15 percent for companies planning to raise at least P5 billion from an IPO.

While Monzon said the SEC had granted a blanket approval, the commission clarified that it only allowed this by way of exemptive relief.