THE PHILIPPINE Stock Exchange (PSE) said publicly listed companies have until Aug. 9, 2026, to declassify their shares.
“We wish to highlight that publicly listed companies with common shares classified as Class A and Class B have until Aug. 9, 2026, to amend their respective articles of incorporation to reflect the declassification of their shares,” the PSE said in a notice dated Aug. 15.
The deadline was announced after the Securities and Exchange Commission (SEC) issued Memorandum Circular (MC) No. 10 on Aug. 7, instructing publicly listed companies to declassify their Class A and Class B common shares and to amend their respective articles of incorporation (AoI).
During the one-year period to amend their AoI, buyers “shall accept” the delivery of the specific class of shares that they have purchased and cannot be forced to receive an alternative class of shares.
The MC, which took effect on Aug. 9, repealed a 1973 rule issued by the SEC that implemented the classification of shares to monitor compliance with the 40% foreign ownership limit of stocks.
The rule states that Class A shares can only be issued to Filipino citizens, while Class B shares may be issued to both Filipinos and foreigners.
The SEC said the MC was issued to ensure efficiency in executing and settling equity trades.
“The classification resulted in unfair disparity in price between Class A and B shares. Such classification has also been the source of administrative inefficiencies for trading participants and the Securities Clearing Corporation of the Philippines,” the SEC said in an earlier statement.
“Further, technological advancements in the PSE’s trading system — which enables strict monitoring and enforcement of foreign ownership limits — has already rendered the classification obsolete,” it added.
The SEC mandated the declassification of shares of listed companies in 1997. However, shares that were already classified as Class A and B remained as such due to the prospective application of the order.
Violation of the MC will be subject to the appropriate penalty under Section 54 of Republic Act No. 8799, or the Securities Regulation Code. — Revin Mikhael D. Ochave
