PSE To Formulate Market Friendly Laws Facilitating DDS Transactions

The Philippine Stock Exchange (PSE) has been seeking comments and suggestions from stakeholders on its draft Rules on Dollar Denominated Securities (DDS). The move has been analyzed as setting stage for issue of the alternative investment instrument. The DDS Rule is expected to allow off-shore investors to reduce currency risk exposure.  

Introduction of DDR is also believed to provide issuers the flexibility meeting their capitalization requirements. DDS will offer the investors an alternative instrument with US dollar deposit accounts, according to a report published in Philippine Star.

The new securities product will intend to enlist companies interested in dollar denominated shares in addition to their peso common shares. PSE has recently disclosed the proposed rules for the listing and disclosure, trading, clearing and settlement and fees of DDS, reports Manila Bulletin.

The introduction of dollar denominated securities listing in the exchange appears in line with PSE's thrust of providing more products and services for the market. PSE intends the companies to have the flexibility of raising capital in dollars with this new product. Furthermore, the alternative investment instrument will also enable the foreign and local investors to trade in the market without facing foreign exchange related risks, reports quoting Hans Sicat, the PSE President and CEO.

Under the proposed rules, companies enlisted at the exchange will be able to issue new set of securities either in the form of common or preferred shares. The shares will be quoted, traded and settled in US dollars. PSE is encouraging its stakeholders to take part in the ongoing consultative exercise. Such practice is expected to provide the most suited law, the emerging market demands for.

The proposed DDS laws seem to be suitable for large companies listed both in the Philippines and overseas. Philippine Long Distance Telephone Co. (PLDT) and Del Monte Pacific appear as the probable beneficiaries of the proposed laws. PLDT has depository receipts traded in New York while Del Monte Pacific is listed both in the Philippines and Singapore Stock Exchange.

Interested parties have been requested to access the circular on the proposed rules for DDS furnished in the PSE website. However, comments on the proposed rules may be sent until March 22. Received comments and suggestions will be taken into considerations while drafting the rules. The draft rules will then be sent to the Securities and Exchange Commission for approval.

PSE has recently disclosed a draft on DDS transaction laws in its official website. Enthusiasts have been requested to comment and provide suggestions till March 22. Since the rules will be formulated following market demands, analysts also predict for an investment friendly law.

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