Philippine Securities and Exchange Commission consults on tiered IPO minimum public float rules ranging from 33 percent to 12 percent

The Philippine Securities and Exchange Commission released for public comment a draft memorandum circular that would introduce a tiered approach to minimum public ownership for companies conducting an initial public offering and seeking to list shares on an exchange. The framework would set minimum initial public float and post-listing maintenance thresholds based on an issuer’s expected market value at the time of the IPO. The proposal defines five tiers: Tier I (expected market value of up to PHP500 million) would require a 33 percent minimum initial public float; Tier II (over PHP500 million up to PHP1 billion) 25 percent, subject to a minimum public float of PHP165 million; Tier III (over PHP1 billion to PHP50 billion) 20 percent, subject to a minimum public float of PHP250 million; Tier IV (over PHP50 billion to PHP150 billion) 15 percent, subject to a minimum public float of PHP10 billion; and Tier V (over PHP150 billion) 12 percent, provided the float is at least PHP22.5 billion. Post-listing, Tier I to Tier III issuers would have to maintain 20 percent minimum public ownership, Tier IV 15 percent, and Tier V 12 percent; shortfalls would have to be cured within 12 months, with prompt notification to the SEC and submission of a time-bound business plan within 10 days of becoming aware of the deficiency. Companies that went public before the rules take effect would remain subject to the 20 percent maintenance requirement under SEC Memorandum Circular No. 13, Series of 2017. Feedback on the draft is open until December 23.