SEC proposes lower public float for Reit

posted October 04, 2016 at 11:30 pm by Jenniffer B. Austria [ thestandard.com.ph ]

The Securities and Exchange Commission is ready to submit a proposal to the Finance Department that will reduce the minimum public float requirement on real estate investment trust companies to 30 percent to attract potential Reit issuers.

“We are already finished with the study and we’ll propose a lower  minimum public ownership requirement, and maybe just reserve the right to increase it when the markets are okay,” SEC chair Teresita Herbosa said in an interview the sidelines of a forum held in Shangri-la at the Fort hotel.

Herbosa said the minimum public ownership for REIT could be subject to review by the SEC after five years.

Aside from the minimum public ownership, Herbosa said the government should also address another important concern of potential Reit issuers—the imposition of a value added on the transfer of assets to Reit companies.

The SEC plans to address the concern to the Bureau of Internal Revenue.

Herbosa said the Finance Department had asked the regulator to start reviewing the corporate taxes on capital markets, including the initial public offering and the stock transaction taxes.

Herbosa is amendable to removing the IPO tax but she hinted the need to increase the stock transaction tax.

“Personally, I don’t have any objection to that (removal of IPO tax) because I was told that we’re the only country with IPO tax. But we have to increase stock transaction tax. So maybe if we increase the minimum public ownership, we will also bat for maybe a little higher stock transaction tax,” Herbosa said.

Sale of shares listed in and sold through the Philippine Stock Exchange are subject to a stock transaction tax at a rate of 1/2 of 1 percent of the total gross selling price.

The review of the corporate taxes on capital markets will be undertaken by SEC together with the Financial Executive of the Philippines and Capital Markets Development Council.

“The tax reform that we are trying to see is where we probably (can) help people get into business, save money. But at the same time, we need to see if there is enough revenues for government undertaking the infra projects during this golden age of infrastructure,” Herbosa said.

Meanwhile, the SEC is now reviewing two new products that will boost the domestic capital markets.

These are the dollar-denominated securities and the rules on public private partnership listing, which will pave the way for listing of PPP companies in the stock exchange.