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Phillipines stock exchange releases tighter rules on backdoor listing

The Philippine Stock Exchange (PSE) has added more layers of protection to shareholders and potential investors in companies with the issuance of tighter rules on backdoor listing. In the new rules stipulated in a recent memorandum circular, the PSE said any backdoor listing will need the approval of at least two-thirds of the entire membership of the board, including the majority (but not less than two) of its independent directors. Transactions considered backdoor listings are those that will result in change in control or de facto control of the listed company, or a change in the composition of the board of directors of the listed company, or those that would result in substantial change in the business of the listed company. The PSE will require a backdoor-listed company to conduct a public offering of at least 10% of its issued and outstanding shares within one year from closing or completion of the transaction.

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