SEC pushes reforms to get more Filipinos into the capital market

The Securities and Exchange Commission (SEC) is pushing a new round of reforms that seek to deepen the local capital market, make it easier for companies to raise capital, and encourage more Filipinos to invest.

The measures include regulatory frameworks for debt and equity offerings, a market-making framework for listed securities, changes to the Personal Equity and Retirement Account (PERA) framework, and a proposed law that would make financial literacy a core subject in secondary education.

“We have made progress in reducing regulatory friction, but there are still structural barriers that prevent businesses from starting faster and companies from tapping the capital market more efficiently,” SEC chairperson Francis Lim said in an emailed statement.

“Our next task is to address these barriers and build a market that is easier to access, more liquid, and more competitive,” he added.

The SEC is proposing to allow companies to start commercial operations once they secure registration or other primary regulatory licenses while completing other government permits, and to shorten the period between company registration and the actual start of business operations.

It is also working with the World Bank to overhaul the public offering framework and separate regulatory requirements for debt and equity securities, making disclosure requirements more proportionate to the type and risks offered and making capital raising more accessible to companies.

It is also working with the Philippine Stock Exchange and the Philippine Dealing and Exchange Corp. on a market-making framework for publicly listed securities to improve trading activity and liquidity.

Other proposed measures include possible refinements to the PERA framework to make it more attractive to both employers and employees, and encourage greater participation in the capital market.

The SEC has also submitted a proposed Financial Literacy Bill that would include financial literacy as a core subject in secondary education.

“A deeper capital market requires not only more issuers and more investment products. We also need Filipinos who understand how to save, invest, and participate in the market responsibly,” Lim said.

The Philippines chairs the ASEAN Capital Markets Forum this year, during which the ACMF will establish its first physical office at the Asian Development Bank (ADB) headquarters in Manila. The SEC is also pushing initiatives on cross-border listings, ASEAN depositary receipts, and greater market connectivity. — RSJ, GMA News