[Last updated: 1 January 2024, unless otherwise noted]

Jurisdiction of incorporation

The PSE does not consider any jurisdictions of incorporation or industries to be unacceptable for a listed company.

Quantitative and qualitative criteria

Generally, a domestic or foreign company seeking a primary listing on the PSE must fulfill both quantitative and qualitative criteria, and additional criteria must be met by a foreign company seeking primary listing. However, such criteria may differ slightly depending on whether the company is listing in the Main Board or SME Board Listing.

Main Board Listing

To qualify for listing in the Main Board, the following requirements must be complied with:

• Track Record of Profitable Operations.

       The applicant company must have:

• A cumulative net income, excluding non-recurring items, of at least PHP 75,000,000 (approximately US$1.36 million) for three full fiscal years immediately preceding the application for listing.
• A minimum net income of PHP 50,000,000 (approximately US$905,000) for the most recent fiscal year.

The applicant company must further be engaged in materially the same businesses and must have a proven track record of management throughout the last three years prior to the filing of the application.

The applicant company must submit to the PSE audited consolidated Financial Statements for the last three full fiscal years preceding the filing of the application.

The Financial Statements must be accompanied by an unqualified external auditor's opinion.

The following are the exceptions to the three-year track record rule:

• The applicant company has been operating for at least 10 years prior to the filing of the application and has a cumulative net income of at least PHP 75,000,000 (approximately US$1.36 million) for at least two of the three fiscal years immediately preceding the filing of the listing application.
• The applicant company is a holding company which uses the operational track record of its subsidiary/ies.

However, a holding company which invokes the operational track record of its subsidiary/ies to qualify for the track record requirement is prohibited from divesting its shareholdings in the said subsidiary/ies for a period of three years from the listing of its shares.

The prohibition does not apply if a divestment plan is approved by the majority of the applicant company's shareholders.

An applicant company that is exempt from the track record requirement must state in its Registration Statement the reason for such exemption.

Companies that are exempt from the track record and operating history requirements are prohibited from offering secondary shares during the initial public offering.

"Secondary shares" means shares originally held by the existing shareholders prior to initial public offering.

• Shareholders' Equity.

  The applicant company must have a shareholders' equity of at least PHP 500,000,000 (approximately US$9.05 million) in the fiscal year immediately preceding the filing of the listing application.

• Minimum offering.

  The minimum offering to the public for initial listing shall be based on the following schedule:

• Market capitalization	Public offer
  Not exceeding PHP 500 million (approximately US$9.05 million)	33% or PHP 50 million (approximately US$905,000), whichever is higher
  Over PHP 500 million to PHP 1 billion (approximately US$9.05 million to US$18.1 million)	25% or PHP 100 million (approximately US$1.81 million), whichever is higher
  Over PHP 1 billion (approximately US$18.1 million)	20% or PHP 250 million (approximately US$4.53 million), whichever is higher

• Operating history.

  The applicant company must have an operating history of at least three years prior to its application for listing.

  Operating history refers to generally uninterrupted commercial operations and the period specified, during which revenues are generated.

  An applicant company that is exempt from the operating history requirement must state in its Registration Statement the reason for such exemption.

• Minimum Number of Shareholders.

  Upon listing, the applicant company must have at least 1,000 shareholders, each owning shares equivalent to at least one board lot.

  The requirement to have at least 1,000 security holders each owning securities equivalent to at least one board lot is only required upon listing.

  Once listed, companies must, at all times, maintain a minimum percentage of listed securities held by the public of 10% of the listed companies' issued and outstanding shares, exclusive of any treasury shares, or as such percentage that may be prescribed by the PSE.

  Companies covered by the Guidelines on Minimum Public Offering Requirements for Initial and Backdoor Listings must maintain a public float of at least 20% after listing.

  The PSE may impose a higher percentage effective upon receipt by the SEC of a written notice of such increase. The PSE may decrease the percentage or suspend or remove the same only with prior approval from the SEC.

SME Board Listing

To qualify for listing in the SME Board, the following requirements must be complied with:

• Track Record of Profitable Operations. The applicant company must satisfy one of the following requirements:
  • Cumulative earnings before interests, taxes, depreciation, and amortization (EBITDA), excluding non-recurring items, of at least PHP 15,000,000 (approximately US$271,500) for the three fiscal years immediately preceding the application for listing or such shorter period as the company has been operating. The applicant must further be engaged in materially the same business and must have a proven track record of management throughout the last three years prior to the filing of the application or such shorter period as the company has been operating; or
  • Cumulative operating revenues or sales of at least PHP 150,000,000 (approximately US$2.72 million) for the three fiscal years immediately preceding the filing of the listing application or such shorter period as the company has been operating, with an average net sales/operating revenues growth rate of at least 20% over the two fiscal years immediately preceding the filing of the listing application.
• Shareholders' Equity. The applicant company must have a stockholders' equity of at least PHP 25,000,000 (approximately US$452,500) in the fiscal year immediately preceding the filing of the listing application.
• Full Payment of Issued and Outstanding Shares. The Applicant Company shall cause all its subscribed shares of the same type and class applied for listing to be paid in full.
• Business Plan. The Applicant Company shall demonstrate its stable financial condition and prospects for continuing growth.
• Minimum offering. Similar with that for the Main Board listing.
• Market capitalization. This requirement has already been removed.
• Operating history. The applicant company must have an operating history of at least two years prior to its application for listing.
• Minimum Number of Shareholders. Upon listing, the applicant company shall have at least 200 shareholders. Each of these shareholders must hold at least one board lot of the securities of the company.

Applicant companies (whether for Main Board or SME Board Listing) should also take note of the rules discussed below.

Nationality Rule. As a general rule, foreign investors may own up to 100% of a domestic market enterprise in the Philippines (whether or not its shares are listed in the PSE) provided that the domestic market enterprise is not engaged in any of the activities listed in the Negative List of the Foreign Investments Act of 1991, as amended (Negative List). A "domestic market enterprise" is an enterprise that produces goods for sale or renders service or otherwise engages in any business in the Philippines. The Negative List enumerates specific activities that are subject to limitation on foreign equity participation, that is to say, may only be undertaken by (i) Philippine citizens, or (ii) Philippine corporations and associations that meet the Philippine-ownership requirement prescribed under the Philippine Constitution or relevant Philippine laws. The latest version is the Twelfth Negative List.

The Negative List comprises two lists: List A and List B. List A contains areas of investment where foreign ownership is limited by mandate of the Philippine Constitution and/or by specific laws. List B contains areas of investment where foreign ownership is limited for reasons of security, defense, risk to health and morals, or protection of local small and medium-size enterprises. The Negative List continues to be further revised. However, amendments to List B cannot be made more often than once every two years.

Corporate governance. Any applicant intending to list with the PSE is expected to have good corporate governance practices, in accordance with SEC Memorandum No. 19, Series of 2016. Please see section 5 for a further discussion of the applicable corporate governance requirements for listed companies.

Sponsorship and submission. There is no requirement for an applicant company to obtain a sponsor to list its securities on the Main Market. However, the applicant company will need to engage the services of a duly-licensed underwriter for the underwriting of its entire issuance.

Interviews. There is no specific requirement for an applicant to conduct interviews with the SEC or PSE in connection with its listing application.

Escrow; lock-up. Lock-up requirements for certain pre-IPO investors are mandated under the PSE Listing Rules. In order to faithfully observe the lock-up provisions, the PSE requires the applicant company to:

• Lodge the shares with the Philippine Depository Trust Corp. (PDTC) for the electronic lock-up of the subject shares or other entity authorized by the SEC.

  Please see the detailed discussion in Item 4 on lodgment of shares.

• Enter into an escrow agreement with the trust department or custodian unit of an independent and reputable financial institution that is acceptable to the PSE in order to have the subject shares physically delivered to the escrow agent for deposit and safekeeping during the lock-up period.

  The escrow agreement must contain, among others, the following points:

  • The applicant company will ensure that the lock-up shares are electronically registered with the PDTC for the electronic lock-up of the subject shares for safekeeping or other entity authorized by the SEC.
  • The escrow agent must notify and seek prior approval from the PSE before the subject shares are removed from its custody.
  • The escrow agent must immediately inform the PSE of a subsequent event if in its sound judgment, it perceives that there is a potential violation of the agreement.
  • Within seven calendar days after the lapse of the lock-up period stipulated in the escrow agreement, the escrow agent must make a final report to the PSE on the total number of shares held in escrow and other information required by the PSE.

Existing shareholders who own an equivalent of at least 10% of the issued and outstanding share capital of the applicant company listed in the Main Board Listing cannot sell, assign or in any manner dispose of their shares for a period of:

• 180 days after the listing of said shares if the applicant company meets the track record of profitable operations requirements; or
• 365 days after the listing of said shares if the applicant company is exempt from the track record and operating history requirements.

Existing non-public shareholders of the issued and outstanding share capital of the applicant company listed in the SME Board Listing and their related parties cannot sell, assign or in any manner dispose of their shares for a period of one year after the listing of such shares. Non-public shareholders comprise the applicant company's (i) principal shareholders (those shareholders owning 10% or more of the issued and outstanding shares); (ii) subsidiaries or affiliates; (iii) directors; (iv) principal officers; and (v) any person who has substantial influence on how the applicant company is being managed. Related parties comprise the non-public shareholders' (i) principal shareholders (shareholding owning 10% or more of the issued and outstanding shares); (ii) subsidiaries or affiliates; (iii) directors; (iv) principal officers; and (v) members of the immediate families sharing the same household of any of its principal shareholders, directors, or principal officers.

Currency. There is no restriction on the currency denomination of the securities.

Clearing and settlement. All securities must be cleared and settled through the Securities Clearing Corporation of the Philippines, a wholly-owned subsidiary of the PSE, organized primarily as a clearance and settlement agency.

Compliance adviser. There is no requirement for a foreign or domestic company, seeking to maintain its listing, to appoint a compliance adviser registered with the SEC.

Additional Requirement. As a condition for the listing and trading of the securities of an applicant company with the PSE, the applicant company is required to electronically lodge its registered securities with the Philippine Depository Trust Corp. (PDTC), or any other entity duly authorized by the SEC, without any jumbo or mother certificate in compliance with the Securities Regulations Code. Lodgment is the process by which shareholders transfer legal title over their shares in favor of PDTC nominee corporation, a corporation wholly owned by the PDTC whose sole purpose is to act as nominee and legal title-holder (but not beneficial title-holder) of all shares lodged with the PDTC. Once lodged, transfers of beneficial title of the securities are accomplished via book-entry settlement.