PSE prepares listing rules for dollar-based securities

THE PHILIPPINE Stock Exchange has urged financial experts and the investing public to help develop the framework for the listing of dollar denominated securities (DDS) in the exchange.

The PSE recently released the proposed rules for the listing and disclosure, trading, clearing and settlement and fees of DDS.

The new securities product is intended for companies interested in listing dollar denominated shares in addition to their peso common shares.

“The introduction of dollar denominated securities listing in the exchange is in line with our thrust of providing more products and services for the market. With this product, we want companies to have the flexibility of raising capital in dollars while at the same time, providing both foreign and local investors the ability to trade in the market without necessarily facing foreign exchange risks,” PSE president Hans Sicat said.

The proposed rules cover the listing and disclosure, trading, clearing and settlement, and fees of DDS. Under the proposed rules, companies that are already listed can issue a new set of securities—either common or preferred shares—that are quoted, traded and settled in US dollars.

“We encourage our stakeholders to take part in this consultative exercise so that the rules we will put in place will be most suited to the requirements of the market,” Sicat added.

Interested parties may access the circular on the proposed rules for DDS through the PSE website. Comments on the rules may be sent until March 22 this year.

The DDS is seen suitable for large companies listed in the Philippines and overseas, like Philippine Long Distance Telephone Co. and Del Monte Pacific.

PLDT has depository receipts traded in New York while Del Monte Pacific is listed here and in the Singapore Stock Exchange.

US dollar-denominated preferred shares can also be listed in the proposed DDS trading facility.

For investors, DDS is seen to provide an alternative investment instrument especially for those with US dollar deposit accounts.

The PSE plans to attract offshore investors and reduce their currency risk exposure.