THE Philippine Stock Exchange (PSE) has revised its index management policy by adopting new market capitalization and liquidity measures, and easing the minimum public float requirement for large listed companies.
In a memorandum issued on Tuesday, the bourse said the revisions — scheduled to take effect next year — were introduced as part of efforts to keep its benchmark indices relevant.
“The changes are part of the exchange’s initiatives to ensure that the PSE indices remain aligned with global standards and responsive to evolving market needs,” the PSE said in Circular 2026-0033.
Among the key amendments is the adoption of a 98-percent cumulative market capitalization threshold as an additional criterion for inclusion in the PSE Index Series.
Only companies that fall within the top 98 percent of the cumulative market capitalization of eligible securities will qualify for the Philippine Stock Exchange Index (PSEi), PSE Dividend Yield Index, PSE MidCap Index and sector indices.
The exchange also introduced two new liquidity measures, the Median Trading Activity Ratio (MTAR) and the Monthly Average Daily Value Turnover.
To qualify for the PSEi, PSE MidCap and PSE Dividend Yield Index, a company must post an MTAR of at least 15 percent, with the threshold reduced to 10 percent for existing index constituents. Firms must also rank among the top 25 percent in terms of monthly average daily value turnover for at least nine of the 12 months under review.
The revised policy also introduces an exception to the exchange’s minimum public float requirement.
While companies are generally required to maintain a public float of at least 20 percent, those with a market capitalization of at least P250 billion may qualify for index inclusion with a minimum public float of 15 percent, provided they satisfy all other eligibility requirements.
The PSE said the amendments would take effect during the February 2027 index rebalancing, giving listed companies, fund managers and investors time to prepare for the changes.
“These amendments will be implemented in the February 2027 index rebalancing, to provide market participants sufficient time to review the changes,” the exchange said.
Separately, the PSE opened a public consultation on a proposal to gradually increase the minimum unimpaired paid-up capital requirement for existing trading participants to P100 million by 2029. Comments will be accepted until July 31.
Under the proposal, the minimum unimpaired paid-up capital requirement will increase to P50 million by the end of 2027. Firms yet to comply with the proposed P100-million requirement will be required to raise their surety bond to P20 million from P12 million by the end of 2028.
The full P100-million capital requirement will take effect by Dec. 31, 2029.
The exchange said the proposed increase was prompted by changes in market conditions, noting that “since the minimum unimpaired paid-up capital for broker-dealers was last adjusted in 2010, the market has seen a substantial growth in transaction sizes, volumes, inflation and systemic risks.”