Firms listed via introduction may be required to hold IPO after 1 year

The Philippine Stock Exchange (PSE) is planning to require companies listing by way of introduction to undertake an initial public offering (IPO) within one year from the listing of their shares on the bourse. 

The plan forms part of the PSE’s proposed amendments to its rules on listing by way of introduction, which refers to the listing of shares without undergoing an IPO. The changes, however, are still subject to comments by capital market players.    

Based on the proposed changes,  “an issuer whose securities are listed by way of introduction shall undertake an IPO within one year from listing of its securities in the exchange and comply with the minimum public ownership requirements.” 

“The exchange may require the issuer to undertake the public offering at any time within the one year period should there be a significant demand for the securities. 

In the event the issuer is unable to conduct the required public offering within the one-year period prescribed, such issuer shall apply with the PSE at least 60 calendar days prior to the lapse of the one-year period, for additional time within which to conduct a public offering,” the PSE said.   

In the event that the issuer files for extension, the exchange, as it deems appropriate, may grant the issuer additional time or deny such application.   

If the issuer fails to conduct a public offering within one year or fails to apply for extension within 60 days prior to the lapse of the one-year period or fails to conduct a public offering within the additional time granted by the exchange, the PSE may at its sole discretion suspend the trading of the issuer’s securities. 

The exchange may also sanction the issuer by doubling the annual listing maintenance fees payable by the issuer or require the issuer to buy back its securities and delist the issuer’s securities from the official registry.

 The PSE has also inserted a provision wherein the rules on listing by way of introduction may apply when listing in an exchange is mandated by law or by the Securities and Exchange Commission.            

The PSE itself was mong those that have listed by way of introduction.