GCash IPO to benefit from lower SBG limit

The Securities and Exchange Commission’s (SEC) move to relax the rule on the single business group (SBG) investment limit will benefit conglomerates with multiple listed subsidiaries, such as the SM and Ayala groups, as well as the planned initial public offering (IPO) of GCash.

- By JAMES A. LOYOLA

Under the prevailing SBG limit, an investment company is prohibited from investing more than 20 percent of its net assets in aggregate, in transferable securities, money market instruments, deposits, and over-the-counter (OTC) financial derivatives issued by any SBG.

The new SEC Memorandum Circular (MC) No. 2, Series of 2025, provides that funds which have no actual investment in financial derivatives shall not be subject to the SBG limit. This includes equity funds, balanced funds, and multi-asset funds that have actual exposure to equity securities.

“This development should help smooth Mynt’s IPO path. Without the memorandum, many funds may have had to reduce exposure to other Ayala companies and/or minimize any planned subscription to the listing,” said leading stock brokerage House Abacus Securities Corp., referring to the owner of top e-wallet GCash.