PSE acquires BAP stake in fixed-income platform

MANILA, Philippines -  The  Philippine Stock Exchange has agreed to purchase the 23 percent stake of the Bankers Association of the Philippines’ (BAP) in PDS Holdings Corp.

“The purchase shall be subject to the approval of government agencies, particularly the Securities and Exchange Commission (SEC) and Bangko Sentral ng Pilipinas (BSP), as may be required by law, and to the compliance with the provisions in the articles of incorporation of PDS,” PSE said yesterday.

 “This transaction is envisioned to facilitate further growth in the local capital markets by introducing efficiencies in the trading and back office systems of both the equities and fixed income markets, among others. It is aimed at creating a better environment for the introduction of more products and services for the various market stakeholders, as well as the implementation of improvements in risk management processes,” it added.

The purchase is subject to certain closing conditions, which includes the grant by SEC of any exemptive relief to acquire additional shares in PDSHC resulting in ownership of more than 20 percent of an exchange and the approval of the relevant regulatory agencies pursuant to law, among others.

The exemptive relief is a condition for the merger because under the Securities Regulation Code, no single industry or business group should own more than 20 percent of an exchange. Thus, the PSE asked for an exemptive relief from the SEC.

The move is part of the plan to merge the PSE with the capital market infrastructure of the PDS Group.

The PSE operates the local bourse while the PDS Group operates the PDex, 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.