SEC opens market-making to P150-M trading firms

Securities trading firms with at least P150 million in unimpaired paid-up capital may now qualify as market makers under new Securities and Exchange Commission (SEC) rules to increase trading activity and improve liquidity in the local capital market. Under SEC Memorandum Circular No.

28, Series of 2026, issued on 15 October, qualified trading participants may engage in market making for equity and fixed-income securities, helping investors buy and sell securities more efficiently. The framework also introduces incentives, including reduced transaction fees, liquidity rebates, and access to enhanced trading facilities, to encourage firms to provide liquidity and support more consistent market activity.

Market making involves the simultaneous posting of buying and selling prices for securities to facilitate transactions, improve price discovery, and maintain orderly trading conditions. An important milestone “Establishing a robust market making framework is an important milestone in our efforts to boost trading activity in the Philippine capital market,” SEC chairperson Francis Lim said.

“We expect this framework to help reduce frictions in secondary-market trading, support more efficient price discovery, and foster a more competitive trading environment for both domestic and international investors,” he added. Under the new rules, trading participants must be accredited or recognized by the relevant exchange and demonstrate sufficient operational capacity and a satisfactory track record.

Each accredited firm must also designate at least one specialist with a minimum of three years of relevant securities trading or market-making experience, or equivalent qualifications. For equity securities, market makers must maintain firm and executable buying and selling quotations for a minimum period set by the exchange, ensuring their active presence during trading sessions.