PSE drums up interest in ETFs

MANILA, Philippines - The Philippine Stock Exchange (PSE) is drumming up the market’s interest in its new investment product – the exchange-traded funds (ETF) – set for launching this year.

In a memorandum, the operator of the country’s sole stock exchange said it will hold a seminar about ETFs on June 28.

“The forum is intended to bring together participants, fund managers, investors and other stakeholders in order to introduce investing in ETFs and to discuss the latest updates in the product,” PSE said.

“It also aims to inform the participants on the rules and regulations relevant to ETFs,” it added.

Industry experts will discuss how ETFs differ from other types of investments and how stakeholders can take advantage of the new investment scheme, PSE said.

Late in March, the Securities and Exchange Commission (SEC) gave its partial nod to the guidelines that will allow the launching of ETFs.

ETFs are securities and investment instruments that monitor a commodity of assets like an index fund but trades like a normal stock in an exchange.

PSE president and CEO Hans B. Sicat earlier said the new product will allow investors to go beyond just cash equities. So far, PSE has 254 listed firms and 134 active trading participants.

ETFs are seen to offer several advantages and investment options to investors, including liquidity especially for those who cannot directly access specific sectors in the market due to a country’s specific regulatory environment.

At least three firms, First Metro Investment Corp. of the Metrobank Group, Sy-led BDO Unibank Inc. and Bank of the Philippine Islands of the Ayala conglomerate have expressed interest in offering ETFs.

SEC earlier approved Parts A and B of the PSE rules, which cover general provisions on listing and disclosure, respectively. Corporate regulators are still evaluating Part C, which tackles rules governing market making for ETFs.

In January, PSE submitted to the SEC its proposed rules that will govern the listing and trading of ETFs after it gathered public comments.

The proposed ETF listing rules, which is governed by the general ETF guidelines issued by the SEC in October, provides for transparency and investor safeguards that adhere to the International Organization of Securities Commissions and best practices in other jurisdictions.