Financial regulators are moving closer to completing the framework for Global Philippine Depository Receipts (GPDRs), a landmark financial product aimed at enhancing market liquidity and expanding investment options for local and international investors.
Philippine Stock Exchange Inc. (PSE) president and CEO Ramon S. Monzon said the PSE is refining the proposed rules for GPDR trading in collaboration with the Securities and Exchange Commission (SEC). The introduction of GPDRs, initially targeted for the first quarter of 2025, has been deferred to allow for further regulatory work, with a formal launch expected later next year instead.
“We are working together with the SEC on the rules and regulations,” Monzon said. “We submitted our initial proposed rules for the trading of the GPDRs. We received comments from the SEC at the end of May, and they’re working to address those comments. So it’s still an ongoing process.”
GPDRs are peso-denominated instruments that offer local investors indirect exposure to securities listed on foreign exchanges. While they represent an economic interest in the underlying security, they do not confer voting rights. Investors will have the option to convert GPDRs into the corresponding foreign shares, enabling portfolio diversification without leaving the local market.
At the same time, Philippine-listed firms will gain access to foreign exchanges through reciprocal listings, potentially increasing liquidity and investor reach, according to Monzon.
“The most important ingredient to get it launched is the regulatory framework,” he added, emphasizing that investor protection and operational clarity remain critical for the product’s rollout.
Monzon credited the Capital Markets Efficiency Promotion Act (CMEPA) for clarifying the legal basis for GPDRs. “We’re glad that CMEPA has expanded the definition of securities to include depository receipts and derivatives. That ambiguity has been addressed,” he said.
The PSE is also consulting with international exchanges experienced in derivatives trading to align local regulations with global best practices. Once finalized, the GPDR framework is expected to open new avenues for capital formation and make the Philippine market more competitive in the region.
