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Listing by way of introduction

The Securities and Exchange Commission (SEC) approved the revised rules of the Philippine Stock Exchange (PSE) on listing by way of introduction. The rules apply to an application for listing of securities that are already issued or securities that will be issued upon listing, where no public offering will be undertaken because the securities would be of such an amount and would be so widely held that their adequate marketability when listed can be assumed, or when listing or public offering is mandated by law or by the SEC or any other government agency.

Listing of securities by way of introduction may be appropriate in any of the following instances:

  1. Where the securities are already listed or traded or will simultaneously be listed on another stock exchange or, subject to the approval of the PSE, listed on another trading market;
  2. Where the securities of an unlisted issuer are distributed by way of property dividend by a listed issuer to the latter's shareholders;
  3. Where a holding company is formed and its securities are issued in exchange for the securities of a listed issuer and the latter's listing is withdrawn at the same time the securities of the holding company are listed;
  4. Where listing of securities in an exchange is mandated by law or by the SEC, in the exercise of its powers under the Securities Regulation Code; and
  5. Where public offering of securities is mandated by law or applicable regulation, provided that the applicant company is not considered a "closely-held corporation" (as defined in the National Internal Revenue Code) and the relevant government agency does not object to the listing by way of introduction of the securities.

The revised rules took effect on April 6 2009.

Rafael A Morales

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