PSE, PDEX merger still up in the air

MANILA, Philippines - The planned merger of the Philippine Stock Exchange (PSE) and the Philippine Dealing Exchange Corp. (PDEX) remains hanging as the corporate regulator is still looking into the viability of the plan.

The Securities and Exchange Commission (SEC) has asked the PSE to provide more information on the planned merger to make sure such a plan would not translate to higher fees for investors.

 “They submitted last Jan. 26.  It’s still under evaluation, “said SEC commissioner Ephyro Amatong.

Industry sources the PSE gave a detailed report on the merger because it really wants to secure the approval of the SEC this time. 

The PSE operates the local bourse while PDex is the country’s fixed-income platform.

The two exchanges are moving to consolidate to offer additional value to issuers, investors, and other market participants at various levels. 

But for this to happen, the merger needs the approval of the SEC through the grant of an exemptive relief from a requirement that prevents the PSE from owning more than 20 percent of an exchange. 

The SEC originally gave the PSE until Dec. 4, 2015 to clarify some of the issues including the actual implementation plan for the merger and whether this would result in higher costs for investors. The PSE, however, asked for more time, which the SEC granted.

The PSE had hoped to get SEC approval as early as November last year after signing share purchase agreements with shareholders of PDS, the Bankers Association of the Philippines, the Finex Research and Development Foundation, Inc., Whistler Technology Services Inc. and Insular Investment Corp.

These four shareholders have a total combined ownership in PDS of 40.06 percent while the PSE’s stake is at 20.98 percent.

Other PDSHC shareholders that have expressed intention to sell their shares to the PSE include the Singapore Stock Exchange, the Philippine America Life and General Insurance Co., the Social Security System, the Investment House Association of the Philippines, Golden Astra, Tata Consultancy Serves Asia and Computershare Technology Services.

PSE president Hans Sicat said the merger would deepen the Philippine capital market and bring the exchange at par with  global markets.