Philippine SEC Sets 150 Million Peso Capital Floor for Market Makers

The Philippine Securities and Exchange Commission (SEC) has set a 150 million peso capital floor for eligible market makers, establishing requirements for firms that provide liquidity in listed stocks and corporate debt.

The SEC adopted Memorandum Circular No. 28 on Oct. 15. It requires market makers to hold at least 150 million pesos in unimpaired paid-up capital, though a higher requirement may apply. Only trading participants accredited or recognized by an SEC-licensed exchange are eligible.

Each firm must designate at least one specialist. The specialist can qualify through three years of experience in securities trading or market making, or through equivalent certifications, training and demonstrated proficiency.

For equities, market makers must maintain executable buy and sell quotes during periods set by the exchange. The framework also covers corporate fixed-income securities listed or enrolled on local exchanges. Government securities handled under the Bureau of the Treasury’s Primary Dealer framework are excluded unless the Philippine SEC extends the rules in coordination with the bureau.

Exchanges must grant market makers incentives, which may include lower transaction fees, liquidity rebates and access to enhanced trading facilities.

Existing market makers have six months from the rules’ effective date to comply. Exchanges must submit implementing guidelines within 30 days of that same date. The effective date depends on publication of the rules.