September 28, 2024 | 12:00am
MANILA, Philippines — The Philippine Stock Exchange Inc. (PSE) will soon enable local investors to establish a globally diversified portfolio through Global Philippine Depositary Receipts (GPDR).
The PSE is currently gearing up for the launch of GPDR, which are peso-denominated instruments where the holder has an economic interest in an underlying security listed on an overseas exchange.
The PSE has released draft rules for the GPDR and are seeking comments from the investing public and market participants.
Once finalized, the PSE will issue the rules to govern the listing, trading, clearing and settlement of GPDR.
“The exchange intends to launch GPDR. The listing and trading of GPDR are intended to provide local investors investment opportunities outside the Philippine market and allow them to build a globally diversified portfolio through GPDR,” the PSE said.
According to the PSE, investors can buy and sell GPDR quoted in Philippine peso through any PSE trading participant during trading hours of the exchange.
Material information, including corporate actions on the underlying security of a GPDR will be published on the PSE EDGE website.
The PSE said that securities listed in the PSE could also be the subject of depositary receipts issued and traded in an overseas exchange in accordance with the rules and regulations of such overseas exchange.
“While the GPDR holder does not possess voting rights in the underlying security, it has the option to convert the GPDR to the equivalent shares or units of the underlying security, subject to the requirements and procedures that will be determined by the GPDR issuer,” it said.
Under the draft rules, eligible to be GPDR issuers include trading participants of the PSE, banks or non-bank financial institutions authorized by the Bangko Sentral ng Pilipinas to issue GPDR as well as investment companies under the Investment Company Act, provided that they have a three-year operating history in their respective lines of businesses at the time of their application.
An applicant must have a minimum paid-up capital and a stockholders’ equity of at least P100 million as of the filing of the listing application.
Eligible GPDR issuers must likewise have systems that are equipped to accommodate the procedures for issuing GPDR and undertaking the commitments under the depositary agreement.
The PSE, which manages the only stock exchange in the Philippines, has been undertaking programs that democratize access to the stock market. It continues to pursue projects that will sustain the company’s growth over the years.
It is also looking to bring in regulatory reforms and marketing campaigns to attract foreign investors into the local market.
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