New IPO Rules Just Dropped: SEC Introduces Tiered Float System So Big Companies Don't Have to Sell as Many Shares

The Philippine Securities and Exchange Commission just shook up the IPO game. In a circular signed on February 24 and effective immediately, the SEC introduced a new tiered public float system that replaces the old one-size-fits-all 20% minimum requirement for companies going public on the Philippine Stock Exchange.

Here's how the new tiers work: Small companies valued at up to ₱500 million must float at least 33% of their shares to the public. For firms worth up to ₱1 billion, it drops to 25%. Companies valued up to ₱50 billion need only float 20%, and larger issuers can go as low as 15%. The biggest companies — those worth at least ₱200 billion — can list with a float as low as 12%.

The logic behind the change makes sense: a 20% float of a ₱200 billion company is already a massive amount of shares — ₱40 billion worth. Requiring the same percentage from a ₱100 million startup creates a very different burden. The tiered approach gives flexibility while still ensuring enough public participation for price discovery and liquidity.

After listing, companies must maintain a minimum public ownership of either 20% or 15%, depending on their size. If they fall below the threshold, they get six months to restore compliance. The SEC also now requires issuers to submit a bookbuilding report within 10 business days of completing an offer — adding transparency to the pricing process.

The timing is notable — the PSEi has been on a hot streak, closing at a 9-month high for five consecutive sessions. These new rules could encourage more large Philippine companies to finally list, potentially bringing fresh liquidity and excitement to a market that's been hungry for new names. Para sa mga investors, this could mean more choices on the trading floor soon.

Source: Reuters