The Securities and Exchange Commission (SEC) has launched a second round of public consultations on its draft memorandum circular overhauling the country’s public offering regulatory framework, aiming to boost efficiency, broaden market access, and streamline rules for debt securities.
The reforms cover key changes: separating debt and equity disclosure requirements, creating a dedicated mid-market debt issuance framework, rolling out a medium-term note (MTN) program, and simplifying registration processes. This second consultation follows an initial review where the commission received 88 submissions, 73 of which advanced to detailed substantive analysis. Regulators noted broad stakeholder backing for the reforms, acknowledging their potential to build a more accessible and responsive public offering system.
Clarifying due diligence standards for MTNs emerged as a key priority. Respondents sought clearer distinctions between requirements at program launch and for subsequent issuances. The SEC confirmed it will align guidance with international practice—comprehensive due diligence at inception, followed by targeted “bring-down” checks for later series—though it stressed that international examples will not be adopted wholesale in final rules.
Eligibility for mid-market issuers is also being recalibrated. Originally defined by total assets of ₱15 million to ₱100 million, the framework will now incorporate additional criteria including paid-up capital and number of employees. Regulators noted feedback that the original threshold might not effectively identify issuers best served by the regime, and that costs could outweigh benefits for smaller firms. The revised standards are designed to target the framework at issuers that stand to gain meaningful financing advantages, while smaller enterprises retain access to alternative funding channels and larger mid-market players stay eligible.
The SEC said all inputs from the second round will help finalize rules that balance robust investor protection with practical, cost-effective access to capital markets.
