(The following press release from the Philippine Stock Exchange Inc. was 
received by e-mail. The sender verified the statement.) 
29 January 2013
PSE seeks SEC nod for final draft of ETF Rules 
The Philippine Stock Exchange (PSE) is seeking the approval of the
Securities and Exchange Commission (SEC) on its proposed rules that will
govern the listing and trading of Exchange Traded Funds (ETFs).   
The proposed rules incorporated industry comments gathered as of January 18. 
"We are thankful to industry practitioners who provided very helpful
insights during the period of public comments. We are eagerly awaiting the
SEC's guidance on this new asset class which, based on the comments we
received, appears to be generating a lot of interest already from the
public," PSE President and Chief Executive Officer Hans B. Sicat said.  
An ETF is an investment fund that is similar to a mutual fund. It is
composed of underlying assets representative of the index it tracks, but
unlike a mutual fund, is traded on a stock exchange real-time during trading
hours similar to stocks.  An ETF usually tracks the main index or other
market indices and replicate their performance.  
The rules shall be governed by the ETF rules issued by the SEC in October
last year. These PSE ETF rules come in three parts namely: the general
provision, listing and disclosure, and market making rules and guidelines
specific to ETFs.  The proposed rules also provide for transparency and
investor safeguards and are adherent to the International Organization of
Securities Commissions (IOSCO) principles for regulation of ETFs and best
practices in other jurisdictions. 
Under the proposed PSE ETF rules, an ETF applying to list on the Exchange
shall have a minimum paid-up capital of at least P250 million. The ETF
company may undertake an offering of its ETF shares when the registration of
such ETF shares becomes effective and its listing application is approved by
the Exchange. Such offering will not be covered by the Exchange's IPO
distribution rules under its listing rules. Likewise, the lock-up and track
record requirements in the listing rules shall not apply. 
The underlying securities comprising the index which the applicant ETF
intends to track must be listed and traded in a registered exchange and
should have sufficient liquidity. The ETF shall disclose the liquidity
criteria in its Prospectus. 
As part of continuing listing requirements, the ETF shall maintain a public
ownership of at least 10 percent of its issued and outstanding shares. It
must ensure that all necessary facilities and information are available to
enable ETF shares holders to exercise their rights. The ETF must also have
an Investor Relations Office to manage its investor relations program.  
Also, the general structured and unstructured reportorial requirements shall
apply to ETFs under the Disclosure Rules of the Exchange in addition to the
reportorial requirements under the SEC ETF Rules. 
ETF participants include the fund manager which should have been in
operation for at least two years and have satisfactory experience in
managing funds. An ETF shall appoint at least two authorized participants
who are registered broker-dealers and active trading participants of the
Exchange who shall have a minimum capital requirement of P100 million, among
At least one of the designated authorized participants of an ETF shall be
designated as a market maker of the ETF.  An ETF market maker is an
authorized participant that assumes the obligation of providing two-way
quotes for the purpose of ensuring liquidity and of maintaining a fair and
orderly trading market to the ETF shares. 
Mr. Sicat said ETFs will provide several advantages and investment options
to investors including liquidity especially for those who cannot directly
access specific sectors in the market due to a country's specific regulatory
environment.  It will also contribute to the diversification of the
investor's portfolio in a cost-efficient manner.  
Public and Investor Relations Department 
Beth S. Lacson 688-7583  <> 
Nina B. Zabella 688-7582  <> 
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which reflect the PSE management's plans, intentions, and assumptions on
events that might directly and indirectly pose risks and uncertainties to
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