SEC to take up PDS takeover by PSE

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Posted on March 20, 2016 08:49:00 PM

By Krista A. M. Montealegre, Senior Reporter

THE SECURITIES and Exchange Commission (SEC) could issue this week its verdict on the much-delayed merger of the country’s equities and fixed-income exchange.

SEC Chairperson Teresita J. Herbosa told reporters last Friday the petition of the Philippine Stock Exchange, Inc. (PSE) for exemptive relief to acquire more than 20% of PDS Holdings, Inc. will be tackled in the agency’s en banc meeting scheduled on Tuesday.

Ibibigay pa lang ang report sa akin ng MSRD (The Markets and Securities Regulation Department will submit its report to me) on Monday, as promised. I’ll know about it on Monday,” Ms. Herbosa said.

The corporate regulator had set as its self-imposed deadline to decide on the PSE’s request 60 days -- or until this Saturday -- from receipt of the equity bourse’s petition last Jan. 26.

SEC Commissioner Ephyro Luis B. Amatong had said regulators will try to come out with a decision before Holy Week, but the PSE petition was not discussed in last Thursday’s meeting.

Hindi nakaya. Nasabugan tayo ng (There wasn’t enough time. It was overshadowed by the) Peñaflor [case],” Mr. Amatong said in a separate interview, referring to the investigation on Jose Cecilio G. Peñaflor, a former PSE employee allegedly behind an investment scam.

The SEC had asked the PSE to clarify the resulting market infrastructure, structure of the consolidated entity and timetable for implementation, among other issues, before coming out with a ruling.

“We are trusting that they will see the benefit of the merger,” PSE Chief Operating Officer Roel A. Refran said in a telephone interview.

One of the smallest stock markets in the region, the PSE is pushing integration of the two exchanges to be able to match bigger Southeast Asian counterparts.

In most markets, only one group or entity operates the equity and fixed-income exchanges.

The creation of one trading platform is expected to bring down costs related to the fixed-income trading operations of banks and other financial institutions.

To recall, the PSE failed to secure the clearance from the SEC on Nov. 27 last year to take over PDS, the holding company that owns the country’s sole fixed-income trading platform Philippine Dealing and Exchange Corp. Such approval was necessary to consummate the share purchase agreements (SPA) between the PSE and PDS shareholders, which expired on the same day.

So far, the PSE has signed SPAs with the Bankers Association of the Philippines; Finex Research and Development Foundation, Inc.; Whistler Technology Services, Inc.; and Insular Investment Corp.

The four shareholders own a cumulative 40.06% stake in PDS, while PSE holds 20.98%.

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