SEC streamlines registration of power companies eyeing IPO

THE Securities and Exchange Commission (SEC) announced over the weekend a streamlined registration process for power generation companies and distribution utilities planning to raise fresh funds through an initial public offering (IPO).

The SEC said in a statement the issuance of Memorandum Circular No. 4 Series of 2024 was aimed at simplifying the registration process for power generation operators and wholesale electricity and retail services (SEC POWERS).

SEC POWERS aim to simplify the registration of securities for power generation companies and distribution utilities mandated to offer and sell their shares to the public, as stipulated in Section 43(t) of Republic Act No. 9136, or the Electric Power Industry Reform Act of 2001 (EPIRA).

The new guidelines lower the minimum public float requirement from 20 percent to 15 percent for listed companies as provided under the EPIRA Law.

The SEC said the streamlined procedure aligns with the government’s policy to enhance the inflow of private capital and broaden the ownership base of the power generation, transmission and distribution sectors.

Under the guidelines, the SEC’s Markets and Securities Regulation Department (MSRD) will complete the review of the registration statement within 45 days from filing. Subsequently, the MSRD will issue a pre-effective letter outlining the conditions to be met.

Upon meeting these conditions, the MSRD will then issue the order of registration and/or permit to sell securities to the public. The public offering and sale of the securities may then commence within 10 business days from the date of the registration statement’s effectivity.

To expedite the processing of the registration statement, the SEC advises registrants to obtain all necessary clearances from the SEC Company Registration and Monitoring Department, Corporate Governance and Finance Department, Enforcement and Investor Protection Department, Office of the General Counsel and Office of the General Accountant (OGA) before filing with the MSRD.