The Securities and Exchange Commission (SEC) is developing a formal regulatory framework for market making in listed securities, aiming to revive market activity and bring local practices in line with global standards. It has released the Draft SEC Rules on Market Making for public feedback until July 7.
Market making improves liquidity, ensures fair price formation, and supports stable trading—key conditions for attracting investments and growing the Philippine capital market.
Under the proposal, only SEC-licensed exchange participants may act as market makers. Eligibility includes a minimum unimpaired paid-up capital of ₱100 million, proven trading experience, a clean regulatory record, and a formal agreement with issuers, the exchange, or authorized parties.
Market makers must post continuous, firm buy-and-sell prices during trading hours and hold enough inventory to sustain liquidity, except during system failures or exceptional events. They will also need to submit regular trading and compliance reports. Exchanges will monitor performance and report to the SEC, while offering incentives such as lower fees and rebates to encourage participation. Exchanges must also adopt their own implementing rules, subject to SEC approval.
