Philippine Stock Exchange Seeks Public Comment on Proposed Rules for GPDR

The Philippine Stock Exchange, Inc. (PSE) requested equities market stakeholders to review and provide feedback on the proposed rules prepared by the Exchange for Global Philippine Depositary Receipts (GPDR).

GPDRs are peso-denominated instruments that represent economic interest in an underlying security listed on an overseas stock exchange. The holder does not have voting rights in the underlying security but has the option to convert the GPDR to equivalent shares or units of the underlying security, subject to the GPDR issuer's requirements and procedures.

“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 be eligible for listing, the GPDR's underlying securities must be listed, traded, and in good standing on a World Federation of Exchanges member exchange, according to the draft rules.

According to the proposed rules, GPDRs may be issued by PSE trading participants, banks and non-bank financial institutions authorized by the Bangko Sentral ng Pilipinas to do so, and investment businesses operating under the Investment Company Act.

Any of the aforementioned firms may be issuers either directly or through a corporate vehicle authorized specifically to issue GPDRs, provided that they have a three-year operating history in their respective lines of business and a minimum paid-up capital of at least Php100 million at the time of their application as a GPDR Issuer.

Aside from GPDR Issuer qualifications, the regulations address basic listing criteria and listing application processing, public offering of GPDRs, fee and entitlement schedules, disclosure standards, trading, and GPDR clearing and settlement, among other topics.
“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: https://documents.pse.com.ph/CircularOPSPDF/CN-2024-0047.pdf