The Philippine Securities and Exchange Commission has opened a consultation on a draft memorandum circular that would revise its long-standing rules on trading Class “B” shares on the regular board and the requirement for buyers to accept delivery of either Class “A” or “B” certificates. The proposal would discontinue the classification of listed companies’ common shares into Class “A” and Class “B” and, during the transition, require buyers to receive the specific class of shares they purchased and paid for. The draft notes that the A/B classification was originally used to monitor the 60% Filipino and 40% foreign ownership requirement, with Class “A” shares issuable only to Filipino citizens and Class “B” shares issuable to both Filipinos and foreigners. It also cites the Philippine Stock Exchange’s current capability to monitor and enforce foreign ownership limits, and identifies administrative inefficiencies for trading participants and the Securities Clearing Corporation of the Philippines, as well as unwarranted arbitrage for holders of Class “B” shares. Listed corporations that still have both classes would be required to amend their Articles of Incorporation within one year from the circular’s effectivity; violations would be subject to penalties under Section 54 of the Securities Regulation Code, and the circular would take effect after publication requirements are met. Comments on the draft are requested on or before 24 May 2025.

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