Back Door Listing
SEC-BED Memorandum Circular No. 06-96 • Securities and Exchange Commission Departments • Markets and Securities Regulation Department (MSRD) • Oct 21, 1996
Full text
October 21, 1996 SEC-BED * MEMORANDUM CIRCULAR NO. 06-96 TO : The Philippine Stock Exchange (PSE) and Publicly Listed Companies SUBJECT : Back Door Listing In order to provide investors with a level of confidence that only securities with deep, active trading markets are listed in the Philippine Stock Exchange (PSE), the following Guidelines for regulating the process of the so called " Backdoor Listings " brought about by corporate takeovers shall be observed: cdll 1. The backdoor listing herein referred to shall mean the practice of buying, controlling, taking over and/or reorganizing listed but otherwise dormant corporations for the purpose of reactivating the trading of their shares of stock in the PSE without going through the requirements for registration of securities under the Revised Securities Act and the implementing rules. Dormant corporations shall refer to corporations whose shares are registered with the SEC but whose listings have been suspended or otherwise delisted by the PSE and inactive listed corporations whose shares are no longer traded. 2. Persons who intend to take over dormant or inactive corporations shall make a tender offer to all stockholders of record of the dormant or inactive corporation at the same price as being offered to majority holders, in accordance with the provisions of the Revised Securities Act. 3. A notice of the tender offer and proposed take over shall be published in a newspaper of general circulation for two (2) consecutive weeks so that all existing and future investors will be fully apprised and properly informed of the take over of the corporation. 4. PSE shall amend its maintenance listing criteria to provide for a minimum number of stockholders, a minimum float which refers to the minimum number of shares traded by the public and a minimum trading volume over a period of time and that the company is current in meeting the registration and reporting requirements under the full disclosure rules. Said criteria shall be submitted to the SEC for approval. Once approved, the criteria must be vigorously enforced. For immediate and strict compliance. (SGD.) PERFECTO R. YASAY, JR. Chairman
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