The Securities and Exchange Commission is redrawing the rulebook for companies eyeing a stock market debut, proposing a tiered minimum public ownership (MPO) framework that could make it easier—especially for large firms—to list on the Philippine Stock Exchange.
In draft rules circulated to the market, the SEC outlined a sliding scale that adjusts required public float based on a company’s expected market value at listing.
Smaller firms valued at up to P500 million would still need to float at least 33 percent of their shares. But as valuations climb, the percentage falls—to 25 percent, 20 percent, 15 percent, and as low as 12 percent for companies worth over P150 billion, subject to minimum peso float requirements.
Bottomline, the bigger the IPO, the more calibrated the float.
The SEC move comes against a backdrop of uneven global IPO activity and relatively thin domestic deal flow. Large offerings can test the market’s absorptive capacity, particularly when liquidity tightens and investor risk appetite wavers.
Requiring a corporate heavyweight to sell a third of itself at listing may be ideal for textbook liquidity—but harder in real-world bookbuilding.
Under the proposed framework, even the largest issuers must still meet hefty peso thresholds—at least P22.5 billion in public float for top-tier listings—ensuring that reduced percentages do not translate into token compliance.
The SEC is also tightening post-listing guardrails. Companies must maintain minimum public ownership—20 percent for smaller tiers, 15 percent for mid-sized large caps, and 12 percent for the biggest firms—or restore compliance within 12 months.
Any breach must be reported by the next business day, followed by a time-bound recovery plan and monthly progress updates.
In a notable transparency push, issuers and underwriters will also be required to submit confidential post-bookbuilding reports detailing investor demand and pricing outcomes.
The data will arm regulators with deeper insight into allocation dynamics and help fine-tune policy over time.
The new rules allow flexibility at the front door, but discipline will have to be observed strictly once inside.
By shifting from a one-size-fits-all threshold to a market-value-based ladder, the SEC is attempting a delicate balancing act—encouraging more listings without diluting investor protection.
If calibrated well, the new float framework could turn IPO math from a stumbling block into a selling point.
