The Philippine Stock Exchange (PSE) board of directors has approved the reinstatement of the rule requiring listed and listing applicant firms to meet a minimum 10 percent public float to maintain their listing status with the Exchange.

The Minimum Public Ownership (MPO) rule has passed through various debates across the terms of various boards of directors of the PSE until 2005 when the rule was revoked as a continuing listing requirement and instead imposed as a requirement only for initial listing and backdoor listing applications.

The MPO rule is in line with the Capital Market Development Plan Action which aims to provide a fair and efficient facility for price discovery and to ensure that sufficient liquidity exists.

The proposed new rule will be disseminated to the public through the PSE website (www.pse.com.ph) for public comments before it is transmitted to the Securities and Exchange Commission for approval.

Currently, the PSE imposes the following Minimum Offering to the Public requirement for initial public offering (IPO) applicants:
– 33 percent for market capitalization not exceeding P400 million;
– 25 percent for market cap over P400 million to P1 billion;
– 20 percent for market cap over P1 billion to P5 billion;
– 15 percent for market cap over P5 billion to P10 billion; and
– 10 percent for market cap over P10 billion.

The proposed 10 percent MPO rule applicable to the existing listed companies is independent of the current Minimum Offering to the Public requirement for initial listing applications as the proposed 10 percent MPO rule is a continuing listing requirement.

“Reinstating the MPO as a continuing listing requirement is aligned with our goals to be at par with the rest of the regional exchanges and to help address liquidity issues in the local capital markets,” said PSE president Francis Lim.

He noted that Securities exchanges in Hong Kong, Singapore and Thailand already impose minimum float requirements of between 10 and 25 percent.