PSE to ease initial listings of pref shares

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April 23, 2026 | 12:00am

MANILA, Philippines — The Philippine Stock Exchange Inc. (PSE) plans to significantly reduce the minimum offer size requirement for initial listing through a preferred shares offering to democratize access to the stock market and allow small and medium enterprises (SMEs) with smaller funding needs to qualify for listing.

The PSE has issued its proposed amendments to the rule on initial listing through preferred shares offering, with stakeholders and interested parties invited to submit their comments until May 5, 2026.

Under the proposed rule, which will govern the initial listing of an applicant company through an offering of preferred shares without listing its common shares, the PSE intends to lower the minimum offer size requirement to P100 million from P1 billion.

“This is double the offering limit under the rules and regulations governing crowdfunding, a platform often tapped by SMEs, and is equivalent to the minimum offering requirement applicable to small-cap IPO applicants or those with market capitalization of over P500 million to P1 billion,” the PSE said.

Given that the minimum offer size is proposed to be reduced by 10 times, the PSE is planning to proportionally adjust the minimum number of stockholders required upon listing to 100 from 1,000 stockholders.

“Otherwise, the maximum subscription of each investor to a P100 million offer would only be P100,000, which is the same as the subscription limit for local small investors,” it said.

Further, the PSE is proposing to change the minimum public float requirement from 20 percent to the level required by Securities and Exchange Commission Memorandum Circular 11, Series of 2026, which ranges from 15 percent to 20 percent, depending on the company’s market capitalization at the time of listing.

The PSE said it may endorse a lower public float requirement in some cases, but in no case should it be lower than 12 percent.

To determine the applicable minimum float requirement, the exchange said the company’s market capitalization must be based on its outstanding and listed preferred shares.

It said that the public float should likewise be computed only on the outstanding and listed preferred shares.

Recognizing that investors’ decision to trade or hold preferred shares is primarily focused on the dividend rate and issuer’s creditworthiness, dividend coverage and cash flow stability, the PSE said it intends to rationalize the 17-C reportorial obligations of issuers and retain only those that affect or may affect the issuer’s ability to pay dividends.

“For instance, resignation or removal of directors or officers, change of address and other developments which will not affect the issuer’s capacity to pay dividends will be removed from the list of events mandating prompt disclosure by ‘preferred shares-only’ issuers, reducing the number of immediately disclosable matters from 42 to 29,” the PSE said.

The exchange said the specified disclosure rules will apply to preferred shares-only issuers to a limited extent.

Meanwhile, consistent with the particular investment considerations of preferred-share investors, the PSE is also proposing to amend the penalties for violations of the disclosure requirements.

The scale of fines under Section 1 of Article VIII of the PSE consolidated rules will be retained for non-compliance with structured continuing disclosure requirements.

However, violations of unstructured disclosure requirements will no longer be categorized as Level 1 or Level 2, with the PSE noting that only Level 1 penalties under Section 2 of Article VIII of its consolidated rules will apply.

Modified penalties are likewise proposed for violations of the blackout rule, the non-disclosure, delayed disclosure, or inaccurate disclosure relating to or affecting the redemption of preferred shares, dividend declaration to the holders of preferred shares, changes in the terms and features of preferred shares, changes in the rights of preferred shareholders and other similar matters, and for violations relative to the changes in shareholdings of directors and principal officers.