The Philippine Stock Exchange, Inc. (PSE) requested equities market stakeholders to review and give their comments on the proposed rules prepared by the Exchange for Global Philippine Depositary Receipts (GPDR).
GPDRs are peso-denominated instruments representing economic interest in an underlying security listed on an overseas stock exchange, where the holder does not possess voting rights in the underlying security but has the option to convert the GPDR to the equivalent shares or units of the underlying security, subject to the requirements and procedures that will be determined by the GPDR issuer.
“GPDRs will pave the way for cross-border trading in the PSE. Aside from expanding PSE’s product offering, GPDRs will enable investors to diversify their portfolio and hold foreign securities without having to directly trade in overseas markets,” said PSE President and CEO Ramon S. Monzon.
To qualify for listing, the draft rules provide that the GPDR’s underlying securities must be listed, traded and in good standing in a World Federation of Exchanges-member exchange.
Based on the proposed rules, GPDRs may be issued by trading participants of the PSE, banks and non-bank financial institutions authorized by the Bangko Sentral ng Pilipinas to issue GPDRs, and investment companies under the Investment Company Act.
Any of the said firms may be issuers by itself or through a corporate vehicle authorized specifically to issue GPDRs, on condition that they have a three-year operating history in their respective lines of businesses, and have a minimum paid-up capital of at least Php100 million at the time of their application as a GPDR Issuer.
Aside from the qualifications of a GPDR Issuer, the rules cover general listing requirements and processing of listing applications, public offering of GPDRs, schedule of fees and entitlements, disclosure rules, trading, and clearing and settlement of GPDRs, among others.
“The rules we came up with were derived from consultations with stakeholders and best practices of our peers in the region. Through this comment period, we hope to get more insights from a broader group of market participants,” Mr. Monzon added.
The proposed rules may be downloaded through the PSE website (www.pse.com.ph). Comments may be submitted to the PSE through ogc@pse.com.ph and bdd@pse.com.ph until October 16, 2024. The comments will be considered in finalizing the Exchange’s GPDR Rules which will be submitted to the SEC for approval.
