Chile's Ministry of Finance has published a preliminary technical proposal to implement a Market Maker Programme for local-currency sovereign bonds, aimed at improving liquidity, depth and price formation in the secondary market while strengthening transparency. The design was prepared by the Ministry’s Public Debt Office and agreed with an inter-institutional implementation committee involving the Central Bank of Chile, the Financial Market Commission and the Pensions Superintendency. The proposed framework would require market makers to provide firm bid and offer quotes in eligible sovereign instruments, participate actively and consistently in primary issuance, maintain a sustained presence in the secondary market, and comply with reporting, traceability and transparency standards. In return, the proposal envisages performance-linked incentives and operational tools, including the possibility of additional bond allocation in primary issuance (green shoe), access to a collateralised securities lending programme, public recognition of performance and preferential participation in certain issuance processes; performance would be assessed through an Activity Index that aggregates compliance with programme obligations. The document also flags potential regulatory and operational workstreams, including assessing how to integrate and regulate off-exchange or over-the-counter trading modalities, particularly with institutional investors, while preserving simultaneity, traceability, reporting and supervisory oversight, and identifying opportunities to strengthen repo and securities lending market infrastructure. The ministry plans to use the proposal as the basis for deeper technical dialogue with market participants and for assessing the operational, regulatory and legal steps needed for implementation, with participation and consultation processes proposed during 2026.

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