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MANILA - The Philippine Stock Exchange is gathering public comments for the proposed listing rules under a "new board" that will replace the existing second and SME boards.
"Listing under this new Board shall be governed by the following proposed rules which shall supersede Article III, Parts E (Second Board) and F (SME Board) of the Revised Listing Rules," the bourse said in a memorandum published on its website.
Deadline for the submission of comments is on or before August 10.
Based on the proposed amendments, listing rules in the new board will feature stricter provisions such as longer lock-up period, stringent track record and profitability requirements, and a business plan for growth.
Under the proposed rules, a potential issuer must have a cumulative pre-tax profit of at least P15 million, excluding non-recurring and extraordinary income and/or loss in the last three year fiscal years immediately preceding the application for listing , as well as a minimum pre-tax profit of P3 million for each of the three full fiscal years.
"The applicant must further be engaged in materially the same business and must have a proven track record of management through the last three years prior to the filing of the application," the rules read.
An applicant must have at least a three-year operating history prior to its application for listing compared to just one year in the current rules.
A potential issuer must also demonstrate its stable financial condition and prospects for continuing growth. In line with this, the company must submit a business plan indicating the steps that have been taken and to be undertaken to advance its business over a period of five years.
While financial projections are not required, references should be made to future profits or losses or any other item that would be construed to indicate forecasts, including financial projections in the business plan duly reviewed by an independent accounting firm.
The company shall cause all its subscribed shares of the same type and class applied for listing to be paid in full.
The amendments also provide a lock-up period of two years compared to only one year in the current rules and a prohibition against selling secondary securities during the initial public offering and change in primary purpose stated in its Articles of Incorporation for a period of five years following the listing.
A listed company initially listed on the new board can only be elevated to the first board only after five years and upon showing that it has met the requirements of listing in the main board.
Applicants will also be covered by full disclosure policy that will require them to promptly submit a comprehensive corporate disclosure following the sale of its assets other than in the ordinary course of business. Fines would be imposed on the company or its subsidiaries. It shall also submit certain disclosure within given periods.
Early this month, the PSE temporarily suspended listing in the second and SME boards after directing a review of its own rules to enhance the safeguards for the investing public.
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