PSE-PDex merger expected to push through

The Philippine Stock Exchange (PSE) is hopeful it will finally be able to merge the stock market with the Philippine Dealing and Exchange Corp. (PDEx), the country’s fixed income exchange, even as corporate regulators thumbed down the proposal last year.

In a briefing late Friday, PSE president Hans Sicat said they have been updating the Securities and Exchange Commission and have been giving them “new submissions” in relation to their application to finally work out the deal.

He expects to have a “formal signing of the term sheet” related to the deal in the next few weeks. The term sheet would have details of the acquisition.

“We’re working with regulators. We’re constantly updating them. We’re more confident than the last time (that it will

happen this time),” Sicat said.

In March last year, the Securities and Exchange Commission (SEC) thumbed down PSE’s request for exemptive relief from the 20-percent limit on ownership of what would supposedly be a unified exchange.

The exemptive relief is a condition for the merger because under the Securities Regulation Code, no single industry or businesss group should own more than 20 percent of an exchange. Thus, the PSE asked for an exemptive relief from the SEC.

The SEC, however, said the PSE failed to present “clear and convincing evidence” that it is entitled to an exemption from the policy behind Section 33.2 of the SRC and its proposed acquisition of PDS will not negatively impact on PDS’ ability to effectively operate in the public interest.

But the PSE and SEC are discussing the matter anew to resolve thorny issues.