THE Securities and Exchange Commission (SEC) on Feb. 24 issued two notices that would encourage more companies to list on the Philippine stock market, as well as develop the country’s Islamic capital market.
Memorandum Circular (MC) 11 series of 2026 introduced a tiered minimum public ownership (MPO) framework for firms joining the Philippine Stock Exchange (PSE).
An MPO — also called a “public float“ — is the smallest percentage of a company’s total shares that must be owned by the general public.
“The new structure recognizes that the liquidity, valuation dynamics, and investor participation patterns of ‘small-cap’ and ‘mega-cap’ companies differ materially,” SEC Chairman Francis Lim said.
Aligning public float requirements with expected market capitalization ensures that rules are “proportionate, economically rational, and responsive to prevailing market conditions,” Lim pointed out.
Companies with an expected market cap of up to P500 million must offer 33 percent of shares to the public, while market caps exceeding P500 million but not more than P1 billion require a 25-percent public float, with a minimum offer size of P165 million.
Firms valued at over P1 billion but not exceeding P50 billion must maintain a 20-percent public float, subject to a P250-million minimum offer.
Mega-cap firms with over P50 billion market cap need a 15-percent public float, with a minimum offer of P10 billion.
For exceptionally large issuers, the MPO may be adjusted further. Firms with a P200 billion market cap are eligible to offer a public float of only 12 percent if liquidity, investor protection, and orderly trading are not compromised.
Investor protection is central to the policy, since higher public float thresholds for smaller-cap companies counter their exposure to volatility, while minimum absolute offer sizes ensure sufficient tradable shares to support liquidity and fair price formation, the SEC said.
Post-IPO, listed companies must maintain minimum public float levels: 20 percent for market caps up to P50 billion, and 15 percent for those above P50 billion.
The new rules also introduce a post-transaction reporting requirement for the book-building process, giving the SEC greater visibility into investor demand, pricing dynamics and allocation outcomes.
Companies listed before MC 11 takes effect may follow MPO rules in place at the time of their listing.
While the circular is effective immediately, the PSE has been given a transitional period to update its listing rules and manuals.
Sukuk guidelines
Meanwhile, Memorandum Circular (MC) 12 series of 2026 sets guidelines for the issuance and disclosure of sukuk or Islamic bonds.
Sukuk — which means certificate or deed — are Islamic bonds that represent partial ownership in a tangible asset, project, or business.
Registration with the SEC is mandatory for sukuk intended for public offering, although listing, trading, and settlement remain subject to relevant exchange rules. Registration does not also mean approval or guarantee of the securities.
The guidelines permit Shari’ah-compliant structures such as Sukuk Ijarah, Murabahah, Istisna, Wakalah bil Istithmar, Mudarabah, Musharakah, and hybrid structures, provided all components adhere to Shari’ah principles and the overall structure, risk allocation and cash flows are fully disclosed.
Prohibited elements include riba or interest-based transactions, gambling, excessive uncertainty, ignorance, corruption and investments in non-permissible goods or activities under Shari’ah law.
Eligible issuers include special-purpose entities created for sukuk issuance, publicly listed companies, non-listed stock corporations, banks supervised by the Bangko Sentral ng Pilipinas, local government units, the national government, and their instrumentalities, subject to notice and disclosure requirements.
Issuers must disclose the purpose of the issuance, sukuk structure and transaction flow, asset valuations, roles and obligations of parties, certification from a Shari’ah committee or adviser, risk factors, and arrangements for Shari’ah compliance.
They must also comply with ongoing reporting obligations, including prompt disclosure of Shari’ah non-compliance, amendments affecting Shari’ah aspects, material changes in assets or structure, updates from credit rating agencies, and submission of an annual Shari’ah compliance report.
All publicly offered sukuk must obtain a credit rating from an SEC-accredited or international agency, and any post-issuance rating changes must be reported to the SEC and disclosed to sukuk holders.
The circular also clarifies that sukuk instruments are subject to neutral tax treatment under the Islamic Banking Act, ensuring parity with conventional finance.
It takes effect 15 days after its complete publication in the Official Gazette or at least two newspapers of national circulation.
