The Securities and Exchange Commission said Thursday it approved the relaxation of listing rules and the grant of temporary relief to companies applying for initial public offerings in 2021 or 2022 to consider the impact of COVID-19 on businesses.
It said time-bound relief would be granted to IPO applicants that were planning to list in the main board or the SME board of the Philippine Stock Exchange.
The corporate regulator said for IPO applications filed in 2021 and 2022, the PSE on a case-to-case basis might consider the profitability of the applicant for any two fiscal years in the three most recent fiscal years, excluding the year of the impact.
It said for an IPO application filed in 2021 by a company demonstrating the negative impact of COVID-19 on its financial condition and results of operations in 2020, the PSE would consider its 2018 and 2019 financial performance.
If the application would be filed in 2022 and the year of the impact was 2020, the two most recent fiscal years of 2019 and 2021 would be considered.
The SEC, however, said the IPO applicant would be required to fully disclose in the prospectus with cross-reference to the audited financial statements the adverse impact of the pandemic on its operations, expected duration of the business effects of the pandemic, recovery measures and business prospects of the applicant in the next five years.
Meanwhile, the SEC also approved the easing of listing rules. A company applying to list in the main board should satisfy the profit test and market capitalization test and meet shareholders’ equity requirement.
Under the approved amended listing rules, a company applying to list under the main board of the exchange should have booked a cumulative net income of P75 million in the past three fiscal years, and a net income of at least P50 million for the fiscal year immediately preceding the filing of the application.
PSE president and chief executive Ramon Monzon earlier said the temporary relief was the local bourse’s way of supporting the government’s initiative to ramp up the economy by assisting companies including SMEs.
“We know that businesses need to access capital to revitalize their operations. By easing certain requirements, we hope to make a significant contribution to the country’s economic recovery process,” Monzon earlier said.
The amended listing rules and the temporary relief in response to COVID-19 took effect immediately.