The Philippine Stock Exchange (PSE) prepares to launch Global Philippine Depositary Receipts (GPDRs) to enhance investment opportunities for local investors by providing access to foreign securities.
It said in a circular posted on its website the initiative would facilitate the listing, trading, and clearing of GPDRs representing economic interests in securities listed on overseas exchanges.
GPDRs are peso-denominated instruments, each representing economic interest in an underlying security listed on an overseas exchange. Holders do not possess voting rights in the underlying security but have the option to convert the GPDR into the equivalent shares or units of the underlying security.
“The listing and trading of GPDRs are intended to provide local investors investment opportunities outside the Philippine market and allow them to build a globally diversified portfolio through GPDRs,” the PSE said.
Under the PSE’s proposed rules for GPDRs, eligible issuers, such as trading participants, authorized banks, and non-bank financial institutions, must have a minimum three-year operating history. These issuers will need to meet capitalization requirements, including a minimum paid-up capital of P100 million.
Investors can buy and sell GPDRs quoted in Philippine pesos through any PSE trading participant during the exchange’s trading hours.
By enabling GPDRs, the PSE seeks to allow investors to diversify their portfolios internationally while trading in Philippine pesos. When the registration of the GPDRs becomes effective and the listing application of the GPDR is approved by the exchange, the GPDRs may be listed on the local bourse without a public offering. However, the GPDR issuer may, at its option, undertake a public offering of GPDRs prior to listing.
The local bourse plans to engage stakeholders in the rule-making process, inviting public comments and providing a checklist of documentary requirements for potential issuers. Interested parties may submit their comments or requests for clarifications on or before Oct. 16, 2024.
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