The Securities and Exchange Commission has given the Philippine Stock Exchange 15 days to submit an improved and more detailed business plan for the operation of the fixed-income exchange with the acquisition of a majority stake in Philippine Dealing System & Holdings Corp.
Sources said the corporate regulator sent a letter to the PSE on Friday, giving the exchange another chance to list concrete steps on how the acquisition would benefit the investing public and companies planning to raise funds through the bond and equities markets.
Sources also confirmed the PSE received a letter from SEC Friday, containing points of clarification regarding the transaction. Sources said once the PSE submitted a detailed business plan, the corporate regulator would act on the PSE’s planned acquisition within the next 60 days.
Documents submitted by PSE to SEC on Oct. 7 and Nov. 23 did not provide detailed plans for the fixed income exchange but only contained specific plans for PDS Holdings’ depository unit, Philippine Depository and Trust Corp., which was an area of interest for the PSE, according to sources.
Sources said the government was very much interested in how the PSE would run the fixed- income exchange because the Philippine Dealing & Exchange Corp., a unit of PDS Holdings, handles trading of government and corporate securities.
The 15-day additional time given to PSE to come up with concrete business plan would depend on whether the exchange as well as the selling PDS Holdings shareholders still wanted to extend the closing of the deal.
Based on the share purchase agreements earlier signed by PSE and several PDS Holdings shareholders, the transaction would be closed on or before Nov. 27, 2015.
PSE sought SEC’s approval for an exemptive relief from a key provision of the Securities Regulation Code, to facilitate the buyout of PDS Holdings.
Under the SRC, no single industry can own more than 20 percent of an exchange.
PSE signed share purchase agreements with four shareholders of PDS Holdings which have a total combined ownership in PDS of 40.06 percent. PSE’s stake in PDS Holdings stands at 20.98 percent.