SEC Firm on 20% Public Float Requirement for IPO

The Securities and Exchange Commission (SEC) remains firm on the 20% minimum public float requirement for companies applying for an initial public offering (IPO), especially given the value of higher public ownership to market depth and efficiency. 

The Rules and Regulations on Minimum Public Ownership (MPO) on Initial Public Offerings (IPOs) is provided under SEC Memorandum Circular No. 13, Series of 2017. The memorandum circular effectively increased the public float to 20% from the 10% requirement at the time.

Beyond enhancing market liquidity, the minimum public ownership requirement plays a crucial role in improving price discovery and reducing opportunities for price manipulation.

The float requirement also seeks to reduce ownership concentration and encourage good corporate governance, ultimately strengthening the Philippine capital market.

After thorough discussions with the Philippine Stock Exchange (PSE), the SEC has allowed, by way of exemptive relief, an initial public float of 15%, subject to strict criteria.

Companies may apply for this relief, provided they bridge any gap from the 20% standard within less than 24 months from the listing date and only as deemed necessary by the Commission.

This covers listing applications already filed with and accepted by the Commission and the Exchange. As of March 25, 2025, the SEC and PSE have yet to receive any application for regulatory relief from any potential IPO applicant.

The SEC is committed to maintaining a fair, transparent, and efficient capital market. While the Commission welcomes new listings, it upholds stringent regulatory standards that safeguard the integrity and long-term stability of the Philippine capital market and the broader economy.