Philippine Securities and Exchange Commission adopts equity and fixed income market-making rules with PHP 150 million capital floor

The Philippine Securities and Exchange Commission has adopted a regulatory framework for market making in equity and fixed income securities listed, traded or enrolled on a regulated exchange, following consultations that initially proposed a PHP 100 million capital threshold and later raised it to PHP 150 million. Government securities covered by the Bureau of the Treasury’s Primary Dealer and Government Securities Eligible Dealer framework remain outside scope unless the Commission expressly extends the rules in coordination with the bureau. Only licensed exchange trading participants accredited or recognized by the relevant exchange may act as market makers. They must maintain at least PHP 150 million in unimpaired paid-up capital, appoint a designated specialist with at least three years of relevant experience or an accepted equivalent, and operate under an approved market-making agreement. Equity market makers must provide firm two-sided quotes within exchange-set duration, spread and size parameters, while fixed income requirements may use firm, indicative or best-efforts quotes based on market structure and liquidity. Market makers must also maintain adequate inventory access and risk controls, retain records for at least five years and report material risk events within one business day. Exchanges will set Commission-approved implementing parameters, publish market-maker and designated-security information, monitor conduct and performance, and may provide approved liquidity incentives. The rules take effect 15 days after complete publication in the Official Gazette or at least two newspapers of national circulation. Existing market makers have six months from effectivity to comply, while exchanges must submit implementing guidelines for Commission approval within 30 days.