The Philippine Stock Exchange (PSE) has issued rules for the listing of exchange traded funds (ETFs), paving the way for the introduction of the investment product in the market.

Under the rules, an ETF planning to list on the PSE must have a minimum asset base of Ps250 million ($6.15 million) for local entities and $10 million for foreign funds.

The fund management company offering the ETF to the public must pass the PSEÆs requirements for investment managers. Once an ETFÆs registration has been approved by the PSE, the ETF shares will be sold through an initial public offering and must comply with the exchangeÆs full disclosure rules.

The PSE is hoping the introduction of ETFs will encourage more investors to reallocate money from bank deposits into funds.

ETFs have become increasingly popular in Asia. Malaysia and Thailand, two of the PhilippinesÆ Southeast Asian neighbours, launched ETFs last year. MalaysiaÆs CIMB launched the worldÆs first Asean ETF in 2006, listed on the Singapore Exchange (SGX) and comprising of the 40 top stocks by market capitalisation and adjusted for free-float across Indonesia, Malaysia, Philippines, Singapore and Thailand.