SEC issues new public ownership framework to boost IPOs

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December 5, 2025 | 12:00am

MANILA, Philippines —  The Securities and Exchange Commission (SEC) has released its planned tiered minimum public ownership framework, aimed at encouraging more companies to pursue listing in the Philippines.

The SEC has issued for public comment its proposed rules and regulations governing the public ownership requirement of companies intending to undertake an initial public offering (IPO) as part of the terms and conditions
for registering securities.

The draft memorandum circular proposes a tiered approach to public ownership
requirements, which
are calibrated according to issuer size and intended to balance multiple policy considerations, including market liquidity, investor protection, capital formation and overall market competitiveness.

“In developing the proposed framework, the commission also considered observations on market absorptive capacity and prevailing investor risk appetite, as well as global and regional shifts in initial public offering activity and evolving approaches in peer markets,” the SEC said.

Under the proposed rules, a covered company filing a registration statement with the intention of listing its shares for trading on an exchange must apply for registration with a public float that meets the minimum requirements.

A  covered company will be classified into its assigned tier based on its expected market value at the time of its IPO, consistent with the tier thresholds set.

Tiers are divided into five, with the minimum initial public offering (IPO) price set at the highest for those with the lowest expected market value at the time of listing.

Under Tier I, for example, companies with an expected market value at the time of listing of less than or equal to P500 million must have a minimum initial public float of 33 percent. In comparison, those with an expected market value at the time of listing that exceeds P150 billion are required to have a minimum initial public float of 12 percent (subject to a minimum public float of P22.5 billion).

In terms of maintenance and the post-listing minimum public ownership requirement, the proposed rules indicate that a covered company must maintain a public ownership percentage equal to or greater than the prescribed minimum public ownership corresponding to its assigned tier at the time of listing at all times.

Tiers I, II and III have a 20 percent minimum maintaining public ownership requirement, while Tier IV has a 15 percent requirement and Tier V has a 12 percent requirement.

The SEC said that if the public  ownership of a covered company falls below its prescribed minimum maintaining public ownership at any time after registration, such a company will bring the public float to the required level within a maximum period of 12 months from the date of such fall.

Companies that made their IPOs before the effectivity of the proposed rules will be subject to the 20 percent maintenance requirement provided under SEC Memorandum Circular No. 13, series of 2017.

The SEC said that a tiered minimum public ownership framework offers a proportionate and market-aligned approach that preserves the long-term benefits of adequate public float, while addressing potential constraints in demand absorption for large issuances.