THE PHILIPPINES is dialing back plans to ease its free float requirements, after neighboring Indonesia contended with a market meltdown following concerns over ownership of tightly-held listed firms.
The Securities and Exchange Commission has set a minimum free float of 15% for large listings, according to a newly released circular on Tuesday. It had initially aimed to bring the floor down to 12% from the current level of 20%, based on a draft it circulated to market participants in December.
The adjustment comes as index compiler MSCI Inc. in January cracked down on Indonesia over the investability of its stocks, partly due to tightly-held ownership of its listed firms. Indonesian stocks saw their worst two-day rout in nearly three decades at one point after MSCI warned it could be downgraded to frontier market status.
According to the new rules, Philippine companies that have an expected market capitalization of more than P50 billion ($865 million) at the time of listing must have a minimum initial public ownership of 15%.
Regulators could allow a lower minimum IPO requirement for 鈥渆xceptionally large鈥 listings if it determines that this wouldn鈥檛 impair market liquidity, investor protection and orderly trading. Such accommodation should not go lower than 12%, it said.
In the earlier draft, the regulator had considered allowing a minimum 12% float for companies with an expected market capitalization of over P150 billion. The SEC has now set the threshold at no less than P200 billion in the latest rules.
The SEC has scrapped its 鈥渙ne-size-fits-all鈥 approach in the new rules, adjusting the required free float based on the size of the listing, subject to a minimum offer size.
The overhaul caps months of public debate as companies say stringent requirements deter them from going public, while authorities look to encourage better investor participation in the stock market.
The move could clear the way for the IPO of local fintech leader GCash, which had argued that a 20% minimum float was too high for a potential offering that would value the e-wallet provider at at least $8 billion. The company previously called for the easing of float rules as it weighs a possible IPO, potentially in the second half of 2026, Bloomberg News reported earlier, citing people with knowledge of the matter. 鈥斅Bloomberg
