The Securities and Exchange Commission (SEC) issued Memorandum Circular No. 11, Series of 2026 last February 24, 2026. This new directive introduces a revised, tiered Minimum Public Ownership (MPO) framework applicable to companies intending to list their shares on the exchange.
According to SEC Chairperson Francisco Ed. Lim, the new structure recognizes that the liquidity, valuation dynamics, and investor participation patterns of ‘small-cap’ and ‘mega-cap’ companies differ materially. As such, by aligning public float requirements more closely with expected market capitalization at the time of listing, the Commission ensures that rules remain proportionate, economically rational, and responsive to prevailing market conditions.
The Revised Tiered MPO Framework
The newly implemented SEC rules determine the required minimum public float based on a company’s projected market capitalization at the time of listing:
- Not exceeding PHP 500 Million: 33% minimum public ownership.
- Over PHP 500M to PHP 1 Billion: 25% (subject to a minimum offer size of PHP 165M).
- Over PHP 1B to PHP 50 Billion: 20% (subject to a minimum offer size of PHP 250M).
- Over PHP 50 Billion: 15% (subject to a minimum offer size of PHP 10B).
To accommodate exceptionally large issuances, companies with an anticipated market capitalization of at least PHP 200 Billion may be granted a lower MPO requirement. Provided that market liquidity and investor protection remain uncompromised, the SEC may approve an initial public ownership requirement no lower than 12%.
Post-IPO Maintenance and Compliance
Beyond the initial listing, companies must subsequently maintain their required public float. The new circular establishes the following maintenance balances:
- Companies with a listing market capitalization of up to PHP 50 Billion must maintain a minimum of 20% public ownership.
- Companies with a listing market capitalization of over PHP 50 Billion must maintain at least 15%.
- Note: If an issuer was granted a reduced initial MPO under the exceptional issuance exception, their maintaining requirement will be equivalent to their approved initial percentage.
In the event a publicly listed company’s required minimum MPO falls below the prescribed requirement, the company shall bring the public float to the required level within a maximum period of six (6) months from the date of such fall. Further, the covered company must report such deficiency and submit a time bound business plan within 10 days which provides the strategic actions to restore the public float to the required levels. Monthly progress reports are also required during such periods.
Lastly, the Securities Regulation Code (SRC) mandates strict administrative sanctions for compliance failures as provided under Section 54 of the SRC, which include suspension or revocation proceedings against their Registration Statement.
This guide provides a general overview of the above transactions at the time of writing only and is not intended to be a comprehensive legal advice. This should also not be taken as an opinion on the topic. For more details and information, you may coordinate with any GVES Law Partner regarding the matter.
Atty. Jianna Mae S. Robles is an Associate at GVES Law.