Philippines introduces market-making framework with ₱150 million capital minimum
Existing market makers will have six months from the circular’s effective date to comply, while exchanges will offer incentives.
Philippine trading participants seeking to become market makers must obtain recognition or accreditation from their exchange and hold unimpaired paid-up capital totalling at least ₱150 million under new Securities and Exchange Commission (SEC) rules.
Memorandum Circular 28 Series of 2026 establishes the framework. SEC chairperson Francis Lim said it should make secondary-market trading smoother and help prices form more efficiently. The commission said the measures aim to improve liquidity and support capital formation.
Market makers quote buying and selling prices simultaneously to support orderly trading and liquidity. The rules cover equities and fixed-income instruments on exchanges regulated by the SEC, whether listed, traded or enrolled.
Government securities subject to the Bureau of Treasury’s Primary Dealer framework remain outside the rules. Any extension to those securities would require an express SEC decision coordinated with the bureau.
Applicants must demonstrate operational capability and a satisfactory track record, and the SEC can set a higher capital requirement. Every accredited firm must designate a specialist whose relevant trading or market-making experience spans at least three years, or who holds an equivalent qualification supported by certifications, training and demonstrated proficiency.
For equities, exchanges will specify how long firm buying and selling quotes must remain available during trading, alongside participation requirements. Exchanges will also determine fixed-income quoting conditions, taking account of the security, trading arrangements, market conditions and liquidity.
Exchange incentives may take the form of lower transaction charges, liquidity rebates or improved trading facilities. Participants already undertaking market making will receive a six-month compliance window beginning when the circular takes effect.
