The Philippine Stock Exchange (PSE) said Wednesday it is amending its board lot rules to allow retail investors to purchase stocks for as low as P100.
PSE president and chief executive Ramon Monzon said in a forum the move would accommodate the expected influx of retail investors from leading mobile wallet GCash.
Monzon said the PSE and GCash would launch on Oct. 19 GStocks—an in-app stock trading platform that would enable GCash clients to invest in the stock market.
“With the board lot amendment, people can invest as low as P100 to buy stocks,” Monzon said.
The board lot determines the minimum number of shares an investor can buy or sell at a specific price range.
Once implemented by the first quarter of 2024, Monzon said this would boost domestic retail participation in the stock market.
The PSE said it would also officially launch on Oct. 23 its short-selling and securities borrowing and lending (SBL) program.
Monzon said the exchange was preparing to launch these two new programs after the securing regulatory approvals.
The Securities and Exchange Commission (SEC) approved the use of offshore collateral for SBL transactions in May 2023, while the Bureau of Internal Revenue confirmed it would accept the filing and registration of the Global Master Securities Lending Agreement starting September.
“We are grateful to the SEC and BIR for their approvals on important regulatory aspects of SBL and short selling. This development brings us a step closer to the full adoption and implementation of these much-awaited programs,” said Monzon.
Short selling is the practice of betting on the decline of a stock’s price in order to make a profit. For instance, an investor sells a security that he does not own, consummated by the delivery of a borrowed security, with a commitment to return the borrowed security or its equivalent on a determined or determinable future date.
Eligible securities in its short selling guidelines would include members of the PSE MidCap and PSE Dividend Yield indices. Initially, only securities comprising the PSE index and exchange traded funds (ETFs) were considered eligible securities for short selling.
The SEC already approved guidelines to facilitate the conduct of short selling in the local market in 2018, but it is only now that the PSE secured all regulatory approvals to finally implement the program.