A CAPITAL ABERTO story from August 2009 showed that countries such as India and the Philippines were restructuring their stock markets inspired by the Novo Mercado, aiming to attract foreign investors. The Brazilian model has now officially won its first international cousin. The rules for the Maharlika Board, the Philippine Stock Exchange (PSE)'s most stringent listing tier, were submitted to public consultation on April 29th.

The Asian country's proposal bears many resemblances to the Brazilian model, starting by its voluntary compliance feature. The mandatory percentage of independent directors will be 30% — the Novo Mercado demands 20%, but the ongoing revision of rules should increase that number to 30%. In addition, directors cannot participate in more than six boards and must not occupy the position for more than five years.

Other aspects described in the Novo Mercado reform draft — such as CEO/chairman separation and mandatory takeover bids (OPA) to all shareholders after any voluntary acquisition reaching a 30% shareholding interest — will also be mandatory in the Maharlika Board. The Philippine trading tier will have arbitration as the method for solving conflicts, just like its Brazilian counterpart.

The requirement of a minimum free float — the percentage of shares dispersed in the stock market — will be slightly higher: 30% compared to the Novo Mercado's 25%. On the other hand, the Maharlika Board will accept companies with more than one type of share, unlike the Brazilian model. The only requirement is that at least 80% of the companies´ shares be voting shares. The PSE's project is open for comments until May 28th.