PSE poised to put up new board for SMEs

The Philippine Stock Exchange has decided in principle to merge it two trading boards for firms with small capitalization and issued a draft set of proposed rules meant to protect investors.   In a memorandum posted on its website, the PSE plans to limit listing on the yet-to-be created board to firms with authorized capital stock of P100 million or more, of which at least 25 percent must be subscribed and fully paid.   "With these proposed rules, we are enhancing the investor-protection features of the listing rules for smaller cap companies intending to list on the PSE," exchange president Hans Sicat said in a press release Tuesday.   The draft rules also lays out four financial minimum standards:  

• pre-tax profit of at least P15 million, excluding non-recurring and extraordinary income and/or loss for the last three fiscal years immediately preceding the application for listing
• minimum pre-tax profit of P3 million for each of the three full
• fiscal years immediately preceding the application for listing.
• operating history of at least three years prior to its application for listing

  The PSE also proposed a stringent requirement of locking up for two years the shares of existing stockholders who own at least 10 percent of the applicant company’s issued and outstanding shares.   This rule seeks to prevents shareholders from selling or disposing locked-up shares.   The new rules intend to prohibit secondary offering during an initial public offer, as well as restrain the list smaller capitalized company from changing its primary business purpose for five years from listing.   "We envision the rules for the new Board to be more responsive to the needs of investors and other market participants,” Sicat said. — Marc Jayson Cayabyab/ELR, GMA News