Based on the draft MOU, the Philippine SEC and the Securities and Exchange Board of India will share information related to the administration and enforcement of their respective securities laws and rules.
The MOU will also cover technical assistance and commitment to give investigative support as permitted by the two agencies’ domestic laws.
This marks the second time that the SEC will ink a MOU with a foreign securities regulator to strengthen ties. The SEC last month signed a MOU with the Capital Market Supervisory Agency of Indonesia.
The move is in preparation for cross-border listing. The SEC is now laying down the policy framework that will allow foreign stocks to be traded at the Philippine Stock Exchange as part of efforts to lure more foreign investors into the country and revive investor confidence.
SEC chairman Lilia R. Bautista earlier said the Commission was looking at the United States and Australian models to determine which would be suitable for application in the Philippine securities market.
She said the US regulatory bodies waive certain rules or procedures to make it easier for foreign stocks to be traded. Foreign stocks, however, are still subject to the usual reportorial requirements like disclosure of material information and submission of financial statements.
The US SEC allows foreign stocks to be traded in the exchange if the issue already has a shareholder base of 300. This threshold, according to Bautista, was the benchmark that there was a market for the particular issue.
The Australian model, on the other hand, does not require foreign stocks to list at the Australian Stock Exchange. –Zinnia dela Peña