THE SECURITIES and Exchange Commission’s (SEC) extension of shelf registration validity to five years from three years is expected to give companies greater flexibility in timing securities offerings, allowing them to better align with market conditions, improve pricing, and reduce compliance hurdles, analysts said.
“Capital raising will be easier for Philippine companies, as regulators are now giving them a wider window to issue securities,” Unicapital Securities Equity Research Analyst Jeri R. Alfonso said in a Viber message on Tuesday.
“For firms with staggered funding needs, this means no longer having to rush into the market just to keep up with the deadline.”
Philstocks Financial, Inc. Research Manager Japhet Louis O. Tantiangco said the extended validity enables companies to issue securities when market demand is strongest, potentially increasing the proceeds per share or bond.
“Easing the constraint gives companies more opportunity to assess market conditions in order to better time their capital raising, possibly selling their securities at more advantageous rates,” he said in a Viber message.
Under the amended Rule 8.1.2 of the Securities Regulation Code (SRC), companies may now issue securities under a shelf registration for up to five years instead of the previous three.
The SEC said the new validity applies to all active shelf registrations when the amendments take effect, with the remaining period counted from the original registration’s effective date.
The commission also simplified filing requirements for subsequent tranches under a shelf registration. Analysts said the streamlined Permit to Sell (PTS) process reduces compliance costs and makes follow-on offerings easier to execute, which could encourage wider adoption of the shelf mechanism.
“Timing is a crucial component that could determine how a public offering will perform. Beyond improving access to the capital market, we want to make it easier for companies to maximize the advantages of tapping the capital market,” SEC Chairperson Francis Ed. Lim said in a press release.
Market watchers said the rule change may boost the use of shelf registration in the Philippines, which has historically lagged regional peers due to narrower issuance windows and higher compliance requirements.
The reform is expected to benefit companies in sectors with predictable capital needs, such as utilities, real estate, and infrastructure, while giving investors a more steady, transparent, and strategically timed supply of securities, according to analysts. — Alexandria Grace C. Magno
