The Philippine Stock Exchange Inc. (PSE) has received approval from the Securities and Exchange Commission (SEC) to temporarily relax the minimum public float requirement for companies raising over P5 billion, such as Globe Fintech Innovations Inc. (Mynt), which owns GCash. Under this exemption, companies can offer as little as 15 percent of their shares, down from 20 percent, with a commitment to conduct a follow-on offering or private placement within two to three years.
This change, effective for at least two years and possibly extendable, aims to address market liquidity issues that could prevent large IPOs from succeeding. Mynt, which seeks a valuation of USD8 billion for its potential IPO, has argued that requiring a 20 percent float would be too large for the market to absorb.
PSE president Ramon S. Monzon emphasized that the exemption would be a “transition period” until liquidity conditions improve, noting that large companies like GCash may not need a follow-on offering if they secure the exemption. However, the PSE’s decision could complicate the inclusion of such companies in the Philippine Stock Exchange index, as companies below the 20 percent threshold are ineligible for index membership.
This regulatory shift highlights the PSE’s efforts to stimulate the market and attract high-profile listings, despite concerns over maintaining global best practices for public ownership in the long term.
