GCash benefits as SEC eases IPO float

The Securities and Exchange Commission (SEC) is poised to ease the minimum public ownership (MPO) requirement for initial public offerings (IPOs), a move that could clear a major hurdle for the long-anticipated market debut of Globe Fintech Innovations Inc. (Mynt), the operator of e-wallet GCash.

- By JAMES A. LOYOLA

The SEC has circulated a draft memorandum circular (MC) outlining a tiered approach to public float requirements, calibrated to the size of the issuer. This change, which comes after lobbying from major potential issuers, appears specifically designed to accommodate large listings like Mynt’s, which had earlier expressed concern that the current 20-percent minimum float would result in an offering too large for the local market to absorb.

The new framework introduces a sliding scale in which the MPO percentage decreases as the expected market capitalization upon listing increases.

The first tier, consisting of firms with an expected market capitalization of P500 million or less upon listing, will be required to have an initial public float of 33 percent.

Tier 2, with a market value of more than P500 million to P1 billion, will need a public float of 25 percent or P165 million.

Tier 3, covering companies worth more than P1 billion to P50 billion, is subject to a minimum float of 20 percent and at least P250 million.