Philippines SEC Establishes P150 Million Capital Requirement for Market Makers

The Securities and Exchange Commission (SEC) of the Philippines has set a minimum unimpaired paid-up capital requirement of PHP 150 million (approximately USD 2.7 million) for trading participants seeking to act as market makers, as outlined in Memorandum Circular 28, Series of 2026, issued on October 15. The framework covers market making in equity and fixed-income securities listed on exchanges under the SEC's jurisdiction.

Market makers are trading participants who continuously quote buy and sell prices for securities, facilitating transactions and ensuring market liquidity. SEC Chairperson Francisco Ed. Lim said the new framework aims to encourage more active trading in the secondary market and to reduce frictions, support efficient price discovery, and foster a more competitive trading environment for both domestic and international investors.

“Establishing a robust market making framework is an important milestone in our efforts to boost trading activity in the Philippine capital market.”Francisco Ed. Lim, SEC Chairperson

Under the new rules, only trading participants accredited or recognized by the relevant exchange may qualify as market makers. These firms must meet the capital requirement and demonstrate sufficient operational capacity and a satisfactory track record. Each accredited firm must designate at least one specialist with a minimum of three years of relevant experience in securities trading or market making, or equivalent qualifications based on certifications and training.

For equity securities, market makers must maintain firm and executable buy and sell quotations for a minimum period set by the exchange to ensure active participation during trading sessions. For fixed-income securities, exchanges will determine quotation parameters based on factors such as the characteristics and liquidity of each security and prevailing market conditions.

To encourage participation, exchanges are required to offer incentives such as reduced transaction fees, liquidity rebates, and enhanced access to trading facilities. Market makers must maintain comprehensive records of orders, trades, quotations, and inventory positions for inspection by the SEC and the exchanges. Quarterly performance reports detailing compliance, disciplinary actions, and enforcement measures must also be submitted to the SEC.

“A deeper and more liquid capital market gives investors greater confidence to participate, enables businesses to raise more capital, and channels private investment into productive sectors that create jobs and support long-term economic growth.”Frederick D. Go, Finance Secretary

Finance Secretary Frederick D. Go welcomed the new rules, stating that they would deepen the domestic capital market and align the regulatory framework more closely with international standards. He said a deeper and more liquid capital market gives investors greater confidence to participate, enables businesses to raise more capital, and channels private investment into productive sectors that create jobs and support long-term economic growth.

Existing market makers will be granted a six-month transition period to comply with the new requirements.