The Securities and Exchange Commission plans to impose the 15-percent minimum public float requirement for companies planning to conduct an initial public offering starting in the second quarter, a highly informed source said over the weekend.
The source said the corporate regulator planned to issue a new ruling next quarter that would raise the minimum public float from 10 percent while the market conditions remained stable.
The source said the new ruling would be prospective and would not cover companies with pending IPO applications with the corporate regulator.
The SEC is also studying plans to gradually increase the minimum public float of all listed firms to 15 percent, then to 20 percent and eventually to 25 percent, which is the average in Asean.
This move was postponed several times amid the volatile market conditions.
As an initial move, the SEC will implement the higher public float requirement to companies that will debut at the local bourse, the source said.
It will continue with its thrust to increase public ownership of listed firms until it reaches 25 percent.
“We have been planing to go to 25 percent from 10 percent through increments because of Asean standard. But in the past two years, if you look at the performance of the index, it has been erratic. So we have not been able to impose the plan,” the source said.
“But this year might be different because so far, the market has been moving flat between 7,200 and 7,300 level. Our target is to issue this new regulation within the second quarter of the year,” the source said.
Among the companies with pending IPO applications are Xeleb Technologies Inc., AudioWav Media Inc., Cebu Land Masters Inc., Bermaz Auto Philippines Inc., Pure Energy Holdings Corp. and Eagle Cement Corp.
Except for Eagle Cement, which plans to offer 11-percent stake to the public, all other IPO-bound companies are offering more than 15-percent public stake in their planned IPOs.
Listed companies were mandated to have a minimum public ownership of 10 percent in 2013.
The imposition of higher public float resulted in the delisting of several companies that were not able to comply with the new ruling.
Among the companies that opted to be delisted from the exchange were San Miguel Brewery Inc., San Miguel Properties Inc., Eton Properties Philippines Inc., Cosmos Bottling Corp., First Metro Investments Corp. and PLDT Communication and Energy Ventures Inc.