No decision yet on Philippine Stock Exchange’s exemptive relief for Philippine Dealing & Exchange Corp. acquisition

MANILA, Philippines — The Securities and Exchange Commission (SEC) said the Philippine Stock Exchange’s application for exemptive relief in line with its plan to acquire the Philippine Dealing & Exchange Corp. (PDS Group) is still pending and has not yet been rejected.  

SEC commissioner Ephyro Amatong said PSE is not yet compliant with the requirements set by the regulator, but it has not rejected PSE’s application.

“It’s not rejected.  Their application for exemptive relief is still pending,” Amatong said.

The SEC has slapped a P106 million fine against PSE for violation of disclosure rules in relation to its move to meet the ownership requirements mandated under the Securities Regulation Code (SRC).

This is in line with the PSE’s plan to acquire a majority stake in the PDS Group, the operator of the country’s fixed income exchange. 

Under the SRC, no single industry can own more than 20 percent of the voting rights of a stock exchange. 

But first the PSE needed to reduce its ownership of the stock exchange to 20 percent from 27.9 percent to be able to proceed with its plan to merge the two exchanges. 

The PSE believes that its rights offering last week has enabled the PSE to take in other shareholders and dilute the ownership in the stock exchange to 20 percent already.  

But the SEC believes this is not the case.

It said that even with the PSE’s stock rights offering, the brokers shareholding in the PSE is 22.05 percent, still exceeding the 20 percent industry limit by 2.05 percent. 

Thus the SEC, through its Markets and Securities Regulation Department (MSRD), imposed the penalty for allegedly issuing inaccurate and misleading information regarding its compliance with ownership requirements.