Trading activity gets much-needed boost with new market-making rules
Trading activity in the Philippine capital market gets a much-needed boost with the issuance by the Securities and Exchange Commission (SEC) of the rules establishing a regulatory framework for market-making.
MANILA, Philippines — The Philippine securities regulator has introduced new rules to enhance market-making activities in the country's capital markets. The Securities and Exchange Commission (SEC) issued Memorandum Circular 28 Series of 2026, which establishes a regulatory framework for market-making, bringing local practices in line with international standards.
This development aims to increase liquidity, improve price discovery, and support capital formation. The SEC chairperson, Francis Lim, emphasized that the framework will reduce frictions in secondary market trading and facilitate more efficient price discovery.
Finance Secretary Frederick Go added that the rules represent a crucial step in deepening the Philippine capital markets, aligning the regulatory framework with international standards. Enhanced market liquidity will boost investor confidence, enable businesses to raise more capital, and allocate private investment into productive sectors, fostering job creation and long-term economic growth.
Market making is defined as a globally accepted mechanism where trading participants provide simultaneous bid and ask prices to ensure market liquidity and maintain a fair and orderly trading environment. The SEC outlines eligibility requirements for market makers, including disclosure, record-keeping, reporting obligations, incentives, and investor protection measures. The rules apply to equity and fixed income securities listed, traded or enrolled on exchanges under the SEC's jurisdiction.
To become a market maker, trading participants must be accredited by the relevant exchange and have a minimum of P150 million in unimpaired paid-up capital. They must also demonstrate operational capacity, a satisfactory track record, and employ at least one specialist with three years of relevant securities trading or market-making experience.
Market makers for equity securities must maintain firm two-sided quotations throughout the trading session, while fixed income market makers will follow exchange-established quoting parameters based on market structure, security type, trading mechanisms, prevailing market conditions, and liquidity.
The SEC has provided a six-month transition period for trading participants already engaged in market-making activities to comply with the new rules.
Written by urgent.news from Philippine Star Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
