Christianne Grace F. Salonga
The Securities and Exchange Commission (“SEC”) has issued Memorandum Circular No. 11, Series of 2026, which adopts a revised framework on the minimum public ownership (“MPO”) requirement for companies seeking to undertake an initial public offering (“IPO”) and list their shares on an exchange.
The Circular reflects the SEC’s policy objective of promoting capital market development while recalibrating regulatory thresholds to better align with current market conditions.
Under the new rules, the required initial public float is now determined using a tiered structure based on the issuer’s expected market capitalization at the time of listing. Companies with smaller market capitalizations are subject to higher public float requirements, while larger issuers are allowed lower percentages, subject to corresponding minimum offer sizes.
Expected Market Capitalization at the Time of Listing | Minimum Initial |
Not exceeding PHP500 Million | 33% |
Over PHP500 Million | 25% |
Over PHP1 Billion | 20% |
Over PHP50 Billion | 15% |
For issuers with exceptionally large expected market capitalizations of at least PHP200 Billion, the exchange may endorse a lower initial public ownership requirement, provided that investor protection, liquidity, and orderly trading are not impaired. In all cases, however, the public float may not fall below 12%. This approach introduces greater flexibility for large offerings while maintaining safeguards to ensure adequate market participation and price discovery.
The Circular also sets out post-listing maintenance requirements. Covered companies must, at all times, maintain a minimum public ownership percentage corresponding to their market capitalization at the time of listing.
Market Capitalization | Minimum Maintaining |
Not exceeding PHP50 Billion | 20% |
Over PHP50 Billion | 15% |
Provided, that where a lower minimum initial public ownership was approved, the minimum maintaining public ownership shall in no case be lower than the approved initial public ownership percentage.
Should the public float fall below the prescribed threshold, the issuer is required to restore compliance within six months and submit a remediation plan and periodic progress reports to the SEC. These measures strengthen ongoing monitoring and ensure that public ownership levels are sustained beyond the IPO stage.
In addition, issuers and underwriters are required to submit a post-transaction report on the bookbuilding process within ten days from completion of the offer. The report will include, at a minimum, a summary of investor demand by price and volume tiers. The SEC clarified that this information will be treated as confidential supervisory data and will be used for market oversight and policy review purposes.
Non-compliance with the Circular may subject the issuer to administrative sanctions under the Securities Regulation Code, including possible suspension or revocation of its registration, where warranted.
The Circular was issued on 24 February 2026 and takes effect immediately upon completion of publication in two newspapers of general circulation. The exchange is given three months from effectivity to align its listing rules and related regulations with the new framework.
The revised MPO rules signal a market-aligned regulatory shift aimed at encouraging more IPO activity while preserving adequate public float, liquidity, and investor protection.
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