PSE proposal opens door for Filipinos to invest in global stocks

Insider Spotlight

• Proposed GPDRs will allow peso-denominated trading of global stocks and exchange-traded funds through the PSE.
• Issuers can list GPDRs without an initial public offering and use shelf listings to match market demand.
• Investors can access international equities through local brokerage accounts while receiving dividends and other entitlements more efficiently.

Philippine Stock Exchange (PSE) president Ramon Monzon said on Thursday that the planned Global Philippine Depositary Receipts (GPDRs) framework is designed to expand Filipino investors’ access to international equities while giving issuers a more flexible way to bring securities to the local market.

The proposal, now undergoing public consultation, would allow the listing of peso-denominated GPDRs backed by global stocks, including single-company shares and exchange-traded funds (ETFs), broadening the range of investment products available on the local bourse.

The big picture

“Under the proposal, one can list peso-denominated GPDRs with underlying global stocks, including single stock and ETFs, with customizable conversion ratios to target a diverse range of consumer preferences,” Monzon said in a statement to InsiderPH.

He said the framework would also streamline the listing process by allowing issuers to bring GPDRs to the exchange without conducting an initial public offering.

“Issuers can list shares directly on the exchange without the need for an IPO and leverage shelf-listings to issue tranches dynamically based on market demand,” the PSE chief added.

Why it matters

The proposed rules seek to make overseas investing more accessible by enabling Filipinos to buy and sell international equities through their existing local brokerage accounts, eliminating the need to open foreign trading accounts.

“The new program also enables the trading of international equities directly through local brokerage accounts, removing foreign brokerage friction and mitigating foreign exchange risks,” he said.

Monzon added that the framework is also designed to improve the handling of corporate actions for investors holding GPDRs.

“At the same time, investors can receive timely distribution of corporate entitlements, particularly cash dividends, net of fees and taxes,” he noted.

The PSE earlier released the proposed GPDR rules for public comment, paving the way for global stocks to trade in pesos on the local exchange if the framework is approved. The initiative is intended to broaden investment choices for domestic investors while enhancing the competitiveness of the Philippine capital market.

— Edited by Daxim L. Lucas