Philippine Stock Exchange - Disclosure Rules

PHILIPPINE STOCK EXCHANGE – DISCLOSURE RULES
Philippine Stock Exchange (PSE)
- the national and sole stock exchange in the Philippines and one of the oldest stock exchanges in
Asia located at the PSE Tower in BGC, Taguig.
- was created in 1992 due to a merge of the two former stock exchanges: (1) The Manila Stock
Exchange and (2) The Makati Stock Exchange
- composed of 15 man board of directors headed by Jose T. Pardo as chairman
- received a “self-regulatory organization” or SRO status from the SEC (meaning it can implement
its own rules and set penalties on erring trade participants and listed companies).
- regulates trading activities trough Capital Markets Integrity Corporation (CMIC)
CMIC
- has the authority to investigate and resolve trading related irregularities and unusual trading
activities involving issuers based on complaints received, findings and reports. It also oversees the
market through a world-class and sophisticated surveillance system called Total Market Surveillance
(TMS)
TMS
– Developed by the Korea Exchange and is designed to safeguard the integrity of the stock
market fraud, manipulation, and breaches of the marketplace rules of erring market players.
Other Initiatives to safeguard interests of the investors:
 Enforcement of static and dynamic thresholds to protect against unusual share price
fluctuations
 Disclosure requirement for publicly listed companies
 Securities Investors Protection Fund, Inc. or SIPF
Companies who plan to list publicly in PSE should:
Comply with the laws, regulations and full disclosure rules and policies of the Phil.
Government
Have standards of quality, operations, and size under efficient and effective management
Conduct issuance, offering the marketing of securities in a fair and orderly manner and
ensure that securities are widely and equitably distributed to the public
Give adequate, fair and accurate information about the company and its securities to the
general public to enable them to make informed investment decision
Ensure that directors and officers act in the interest of all security holders as a whole,
particularly where the public represents only a minority of the security holders or where a
director or security holders owning a substantial amount of shares has a material interest in
a transaction entered into by the company
General Criteria for Admission to listing in the PSE:
Track record of profitable operations

Exceptions to the 3-year track record requirement
Positive Stockholders’ equity
Market Capitalization
Operating history
Minimum capital requirement
Minimum offering to the Public
Minimum number of stockholders
Valuation of assets
Full payment of issued and outstanding shares
Investors relation program
a. Company Information
b. Company news
c. Financial Report
d. Disclosures
e. Investors FAQ’s
f. Investors contact
g. Stock Information
A company that incurs negative stockholders’ equity for 3 consecutive years shall be subject to
delisting, in accordance with the rules of the exchange.
Disclosure Rules
All companies listed in the PSE are required to comply with its disclosure rules. The basic
principle of the exchange is to ensure full, fair, timely and accurate disclosure of material information
from all listed companies.
Classification of Corporate Disclosure:
1. Structured Continuing Disclosure
– reportorial requirements submitted within specific time frames such as annual,

quarterly, and monthly reports. This includes:
a. Annual report (SEC Form 17-A)

b. Three Quarterly Reports (SEC Form 17—Q)
c. Reports on beneficial Ownership
d. Other periodical reports to update and keep current information on the operation
of the business and financial condition of the company
2. Unstructured continuing disclosure
– communications of corporate developments as they happen and are intended to

update the investing public on activities, operations and business of the company.
Objective: for the company to update the investing public with any material fact or event that
occurs which would reasonably be expected to affect investors’ decision in relation to the
trading of its securities.
Disclosures must be made promptly by the issuing company if it meets any of the ff:
a) Where the information is necessary to enable the company and the public to appraise their
position or standing, such as, but not limited to, those relating to the company’s financial
condition, prospect, development projects contracts entered into in the ordinary course of
business or otherwise, merger and acquisitions, dealings with employees, suppliers, customers
and others, as well as information concerning a significant change in ownership of the issuer’s
securities owned by insiders or those representing control of the issuer; or
b) Where such information is necessary to avoid the creation of a false market for its securities
c) Where such information mar reasonably be expected to materially affect market activity and the
price of its securities
Some events that prompt disclosure if required from listed companies:
 Change in the control of the company

 Filing of legal proceeding against the company involving a claim amounting to 10 %
company’s assets
 Change in corporate purpose and material alterations in company’s activities or
operations
 Resignation or removal of directors, officers or senior management and their
replacements and the reasons for such
 Losses or potential losses, the aggregate of which amounts to at least ten percent of the
consolidated total assets of the company
 Dissolution
 Contracts of any nature that might limit the distribution of profits
 Fines of more than 50,000.00 and/or other penalties on the company or on its
subsidiaries by regulatory authorities and the reasons
 Merger, consolidation or spin-off of the company
 Modification in the rights of the holders of any class of securities issued by the company
and the corresponding effect of such modification upon the rights of the holders
 Declaration of cash dividend, stock dividend and pre-emptive rights by the board of
directors
 Any change in the company’s fiscal year and the reason(s) behind
 All resolutions, approving material acts or transactions, taken up in meeting of the board
of directors and stockholders of the company
Corresponding penalties are meted to listed companies that fail to comply with the disclosure
requirements of PSE.

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PHILIPPINE STOCK EXCHANGE – DISCLOSURE RULES

Philippine Stock Exchange (PSE)

Other Initiatives to safeguard interests of the investors:

Companies who plan to list publicly in PSE should:

Track record of profitable operations

Classification of Corporate Disclosure:

1. Structured Continuing Disclosure

– reportorial requirements submitted within specific time frames such as annual,

a. Annual report (SEC Form 17-A)

– communications of corporate developments as they happen and are intended to

Some events that prompt disclosure if required from listed companies:

 Change in the control of the company

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