By Alexandria Grace C. Magno, Reporter
THE PHILIPPINE Stock Exchange (PSE) is proposing to chop the minimum public offer size for preferred shares to P100 million from P1 billion, because it tries to open the capital market to smaller firms and boost participation.
In a consultation paper dated April 21, the exchange said the proposed changes to its listing rules are supposed to “democratize access to the stock market,” particularly for small and medium enterprises (SME) that won’t have the size to fulfill strict requirements.
“That is double the offering limit under the principles and regulations governing crowdfunding, a platform often tapped by SMEs,” the PSE said.
Additionally it is comparable to the minimum offer size required of small-cap firms applying for an initial public offering (IPO).
To enhance the lower offer size, the PSE can be proposing to scale back the minimum variety of shareholders required upon listing to 100 from 1,000. The move will make sure that subscription levels remain workable for smaller offerings.
The exchange is likewise looking for to align its public float requirements with Securities and Exchange Commission guidelines, setting the minimum float at 15% to twenty% depending on market capitalization. In certain cases, a lower float could also be allowed, though not below 12%.
Market analysts said the proposal could significantly expand access to capital for SMEs while introducing latest dynamics in pricing and investor behavior.
John Tristan D. Reyes, president of BDO Securities Corp., said the lower threshold would make it easier for smaller firms to boost funds without relying heavily on bank loans or diluting ownership.
“The present P1-billion requirement is just too high for a lot of SMEs, so this modification helps them transition more easily from private funding to the general public market,” he said in a Viber message, noting that broader access to financing could support business expansion and job creation.
But investors might demand higher returns, particularly from smaller or less-established issuers, underscoring the necessity for strong governance and clear dividend structures, he identified.
Marky Carunungan, an analyst at F. Yap Securities, noted that while the move lowers barriers to entry, it doesn’t guarantee a surge in issuance since preferred shares remain credit-driven instruments.
“The change should broaden the issuer base but in addition introduce wider dispersion in credit quality,” he said, adding that this may lead to greater investor selectivity and more varied pricing.
Under the proposal, the PSE plans to streamline disclosure requirements for issuers listing only preferred shares.
Reporting will concentrate on events that directly affect an issuer’s ability to pay dividends, while nonmaterial disclosures akin to changes in directors or business address will now not require immediate reporting.
The variety of reportable disclosure items is about to be reduced to 29 from 42, while some requirements will likely be removed or applied on a limited basis.
The exchange can be proposing adjustments to its penalty framework, including simplified fines for disclosure violations and specific sanctions for breaches involving dividend payments and shareholder rights.
The PSE is accepting comments on the proposed changes until May 5, 2026, because it seeks feedback from market participants before finalizing the revised rules.