Date of Publication: 18 August 2026
The Philippine Stock Exchange (PSE) has introduced a new route for companies to list preferred shares without conducting an initial public offering (IPO).
The PSE announced that the Securities and Exchange Commission approved amendments to Article III, Part H of the PSE Consolidated Listing and Disclosure Rules. The amendments, dated 12 August 2026 and effective immediately, allow companies to list preferred shares through either an initial public offering or a direct listing. A copy of PSE Circular No. 2026-0037 may be accessed here.
Significantly, a company may list its preferred shares without listing its common shares. The company retains the discretion to list its common shares subsequently.
Direct Listing of Preferred Shares
Under the new Rules, a company may apply for the direct listing of preferred shares without making a public offering at the time of listing. Preferred shares issued through private placements involving qualified or non-qualified institutional buyers, as well as sales to qualified institutional buyers, may qualify for direct listing.
Upon listing, the preferred shares become immediately tradable on the PSE, subject to the applicable transfer restrictions and post-listing offering or sale requirement.
Because no public offering takes place at the time of direct listing, several requirements ordinarily applicable to an IPO are waived. These include requirements relating to:
• the engagement of an underwriter;
• issue manager and underwriter undertakings;
• a stabilization fund;
• the offering price;
• the minimum public offering;
• the minimum number of stockholders upon listing;
• the IPO lock-up; and
• the distribution of IPO shares through the PSE.
The direct listing route, however, does not dispense with public participation altogether. Within one year from direct listing, the issuer must ensure the distribution of at least PhP50 million worth of the same class or series of preferred shares to at least 100 investors. The offering or sale may be undertaken by the issuer, an existing stockholder, or an arranger or issue manager.
A secondary offering or sale of the directly listed preferred shares remains subject to the registration requirements of the Securities Regulation Code and other applicable laws and regulations.
If the directly listed preferred shares were issued pursuant to an exempt transaction and were not registered with the SEC, any subsequent sale, assignment, or transfer must likewise qualify as an exempt transaction. The holders must give prior notice to the issuer and its stock transfer agent and comply with the applicable documentary and procedural requirements. Any sale or transfer must also be effected through the PSE facility or system for negotiated transactions.
Failure to meet the post-listing distribution requirement may result in one or more sanctions, including suspension of trading, increased annual listing maintenance fees, or a mandatory share buyback followed by delisting.
Lower Requirements for Preferred Share IPOs
The amendments also make the traditional IPO route for preferred shares more accessible.
For an IPO of preferred shares on either the Main Board or the SME Board, the minimum public offering is now PhP100 million. Upon listing, the issuer must have at least 100 stockholders, each holding at least one board lot.
These thresholds are substantially lower than the previous PhP1 billion minimum offering and 1,000-stockholder requirements.
Implications for Issuers
The new framework may be particularly useful for companies seeking the benefits of an exchange listing for their preferred shares while retaining their common shares as privately held securities.
For companies that have already issued preferred shares through private placements, direct listing may provide holders with greater liquidity, a market-based reference price, and access to an organized trading platform. It may also facilitate future capital-raising transactions without requiring the company to list its common shares.
Issuers considering this route should carefully assess:
• whether the previously issued preferred shares qualify for direct listing;
• restrictions on transfers of unregistered securities;
• the one-year post-listing distribution requirement;
• securities registration or exemption requirements for subsequent sales;
• continuing disclosure and other PSE listing obligations; and
• the potential sanctions for failure to satisfy the post-listing distribution requirement.
The amended Rules also streamline the continuing disclosure regime for issuers listing only preferred shares by focusing principally on developments that affect or may reasonably be expected to affect the issuer’s ability to pay dividends. These include changes to the terms or rights of the preferred shares, defaults affecting dividend or redemption obligations, material debt defaults, and changes in credit ratings.
The PSE has also issued a detailed checklist of documentary requirements for an initial direct listing of preferred shares. These include corporate approvals, financial statements, a prospectus or equivalent disclosure document, an initial listing price report prepared by the issuer’s financial adviser, information regarding the private placement investors, and the appropriate SEC documentation supporting any claimed exemption from registration.