The Philippine Stock Exchange (PSE) is proposing to significantly ease listing rules for preferred shares offerings, aiming to draw more small and medium enterprises (SMEs) into the capital market.
In a consultation paper, the PSE said it plans to slash the minimum public offering size for preferred shares offerings to P100 million from P1 billion, a tenfold reduction meant to ‘democratize access’ to the market.
The exchange said the move would align the requirement with small-cap initial public offering (IPO) thresholds and provide an alternative to crowdfunding, which SMEs often tap for funding.
Alongside this, the PSE is proposing to lower the minimum number of stockholders upon listing to 100 from 1,000, reflecting the smaller offer size.
The exchange also plans to revise public float rules, shifting from a fixed 20 percent minimum to a range of 15 percent to 20 percent, in line with SEC Memorandum Circular No. 11-2026.
In some cases, the PSE may allow a lower public float, but not below 12 percent, based on a company’s market capitalization at listing.
Easier disclosure requirements
To further encourage listings, the PSE is seeking to streamline disclosure requirements for ‘preferred shares-only’ issuers, focusing on information that affects dividend payments.
This will reduce the number of reportable events requiring prompt disclosure to 29 from 42, removing items not tied to an issuer’s ability to pay dividends.
Certain disclosures-such as reports on top shareholders and some corporate changes-will no longer be required, while sector-specific certifications will be added for mining and energy firms.
The PSE is also proposing a modified penalty framework, retaining fines for structured disclosures but simplifying penalties for unstructured violations to a single level.
Higher penalties will apply to violations affecting preferred shareholders’ rights, including dividend declarations, redemption terms and changes in shareholdings of key officers.
The exchange is inviting comments from market participants until May 5, 2026, after which the final rules may be refined from the draft.
Proponents
Investment banker Eduardo Francisco, president of BDO Capital and Investment Corp., earlier urged the PSE to lower the minimum offering size to P500 million, saying listing-even via preferred shares-could help smaller firms build credibility and attract investors.
‘If they are not yet listed, preferred [shares offering] is a safer way to introduce them,’ Francisco said.
He added that once listed, companies would also have an easier path to conduct follow-on offerings, whether of common or preferred shares.
‘At least, they have a seal of good housekeeping,’ he said.