THE Philippine Stock Exchange (PSE) said the global Philippine depository receipts (GPDRs) are targeted to be implemented by the first quarter of next year.
Ramon Monzon, PSE president, said at the Philippine Capital Market Dialogue yesterday, this will then be followed by the launch of PSE’s index futures trading by 2026.
GDPRs are peso-denominated instruments that represent an economic interest, but not voting rights, in an underlying security listed in an overseas exchange.
Holders of GPDRs will have the option to convert them into equivalent shares or units of the underlying security.
Monzon said the trade of GDPRs “will allow local investors to diversify their portfolios by trading foreign securities within the domestic market.”
It will also allow locally listed firms to be traded in other exchanges, generating additional liquidity for the local market, Monzon said.
Last month, the PSE released the draft rules for GPDR.
Under the draft rules, a GPDR shall be freely tradeable in the PSE on a sponsored or unsponsored basis.
For sponsored GPDRs, a foreign company which issued securities in an overseas exchange has to enter into an agreement with a Philippine-based GPDR issuer, which are normally banks, stockbrokers and investment houses, to sell GPDRs representing such securities in the PSE.
“For unsponsored GPDRs, GPDRs are issued by a Philippine-based GPDR issuer which acts as an intermediary but does not have a formal agreement with the underlying company in the overseas market,” the PSE said.
“Each GPDR, whether sponsored or unsponsored, represents a security listed on an overseas exchange and deposited with a custodian appointed by the GPDR iIssuer in the relevant home market. The underlying securities are registered in the name of the custodian and held on behalf of the GPDR issuer who, in turn, holds the beneficial interest in the underlying securities,” the PSE added.
Monzon said the PSE will introduce its index futures with the PSE index as the underlying asset by 2026.
The PSE is conducting learning sessions with other stock exchanges and foreign market participants such as the Hong Kong and Taiwan Stock Exchanges, Citibank, HSBC, International Swaps and Derivatives Association, KGI and Maven to develop and introduce derivatives in the Philippine stock market for the derivatives trading.
“The introduction of derivatives is expected to enhance market transparency and liquidity by providing market-based pricing information,” Monzon said.
“We are targeting to launch our derivative products by the first quarter of 2026 as we have to work on the regulatory frameworks at both the SEC (Securities and Exchange Commission) and the BIR (Bureau of Internal Revenue,” he added.
