SEC maintains 20% public float for GCash IPO, allows 15% under strict criteria

The Securities and Exchange Commission (SEC) has not received an application from GCash to lower the minimum public float requirement for its initial public offering (IPO), but it approved a plan by the Philippine Stock Exchange (PSE) to relax this requirement.

GCash seeks a reduction of the 20% public float requirement to between 10% and 15%, though no request has been filed yet, according to SEC chairperson Emilio Aquino.

In response, the SEC stated it remains firm on the 20% minimum public float requirement but would allow an initial public float of 15 percent under strict criteria, with companies required to bridge any gap from the 20 percent standard within less than two years from the listing date.

The SEC emphasized that its current rule enhances market liquidity and reduces opportunities for market manipulation, while GCash has lobbied for a waiver due to concerns over market capacity to absorb shares.

Despite ongoing discussions, no applications have been submitted by potential IPO applicants seeking regulatory relief from the 20% minimum public ownership (MPO) requirement as of March 25.

The SEC's decision implies that GCash must adhere to the 20% rule initially and gradually increase its public float over a two-year period.