The Securities and Exchange Commission (SEC) moved to streamline corporate bond fundraising by introducing draft rules that would simplify issuances, lower compliance costs and speed up companies’ access to long-term financing while preserving investor protection.
In a draft memorandum circular released on June 23, SEC Chairman Francisco Ed. Lim said the proposed amendments to the Securities Regulation Code’s implementing rules would align disclosure requirements with “the debt securities’ nature” rather than standards primarily designed for equity offerings.
“Over the years, our public offering framework has largely evolved around equity issuances,” Lim said, adding that the reforms seek to establish a fit-for-purpose framework for debt securities.
He noted some existing requirements are “no longer proportionate” to the information bond investors need or the debt fundraising realities.
“One that reduces unnecessary frictions, promotes market efficiency and enables more companies to tap the public bond market as a source of long-term funding,” Lim stated.
The chairman mentioned that the proposal would allow companies issuing only bonds to focus disclosures on creditworthiness and debt repayment capacity, while listed firms issuing bonds would submit a supplemental disclosure document tailored to fixed-income investors.
“These measures are intended to reduce compliance costs and preparation burdens that may discourage growing companies from accessing the capital market, while preserving transparency and comparability for investors,” Lim said.
Meanwhile, the SEC stated the draft rules would also introduce a “medium-term note program” allowing qualified issuers to register a bond initiative once and conduct multiple offerings over as long as five years through simplified filings.
The commission said the proposed circular is open for public comment until July 9.
The proposed reforms form part of the regulator's broader effort to deepen the country's capital market by encouraging more companies to raise long-term funds through the domestic bond market instead of relying on traditional financing sources.
Written by Ericko Malimban, Insight PH
Ericko Malimban, Insight PH is a dedicated campus journalist and contributor. Their insightful writing sparks meaningful conversations and keeps the community informed.
