THE Securities and Exchange Commission (SEC) has approved the rules on the listing, trading and settlement of dollar-denominated securities at the Philippine Stock Exchange (PSE).
The SEC said the measure aims to provide issuers with dollar-denominated requirements an opportunity to raise capital without incurring foreign-exchange risks.
“It can also reduce the currency-risk exposure of foreign investors who trade PSE-listed securities. Moreover, it offers local investors an alternative investment option for their US dollar-currency holdings,” the SEC said.
The eligible issuers of dollar-denominated securities are those existing listed companies in good standing with the PSE.
They must not have any outstanding penalties or other liabilities to the PSE, not the subject of any order of suspension from trading or any involuntary delisting proceedings and not the subject of any pending case, investigation or similar proceeding by the PSE for violation of any applicable laws, rules, regulations or orders.
The PSE may also take into account other material factors, events, circumstances and other related matters that impact the issuer, which is also required to engage at least two eligible brokers qualified to trade the securities.
The eligible brokers are those trading participants of the PSE who complied with requirements.
These include attending the training session or seminar conducted by the PSE, must be operationally ready to trade the security, maintain a US-deposit account or foreign-currency deposit unit and a separate US dollar-settlement account for clearing of trades, and open a separate US dollar cash-collateral deposit account for the security.
Brokers should also submit an undertaking to obtain the consent of its clients to the disclosure of their names to the SEC if the agency requested an information in its course of an investigation, examination, official inquiry or as part of the surveillance procedures or compliance with laws.
The brokers shall also include the dollar transactions in the markets’ end-of-day reports generated by the PSE.
The procedures for securities deliveries are the same as with peso-denominated securities. However, settlement shall be denominated in US dollars.
“Thus, brokers intending to participate in the trading of dollar-denominated securities are required to have a US dollar-deposit account with any universal or commercial bank, and a separate US dollar cash-settlement account with the designated settlement bank,” the SEC said.