The Philippine Stock Exchange, Inc. (PSE) has developed a general framework for all market-making operations, aiming to significantly enhance liquidity and efficiency in the local stock market.
Market making involves the continuous provision of liquidity by designated Market Makers through the simultaneous posting of two-way (buy and sell) quotes, ensuring smoother and more active trading in compliance with regulatory standards.
“Having a main framework will make it easier and more efficient for us to craft product-specific market making rules when needed,” said PSE President and CEO Ramon S. Monzon. “A market maker has an important role in ensuring continuous liquidity in the stock market. We updated the rules based on global industry standards.”
While the PSE’s existing market-making rules apply exclusively to Exchange Traded Funds (ETFs), the newly proposed amendments expand this scope to include Global Philippine Depository Receipts (GPDRs). The framework is also designed to scale, with plans to cover individual stocks and other exchange-traded products in the future.
To ensure market stability and institutional capability, the PSE has outlined strict eligibility criteria for Trading Participants (TPs) wishing to register as Market Makers:
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Regulatory Standing: Must be a registered broker-dealer with the Securities and Exchange Commission (SEC) and an active PSE Trading Participant.
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Financial Capability: Must possess an unimpaired paid-up capital of at least Php 100 million.
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Operational Track Record: Must have been continuously operating as a TP for at least three (3) years prior to application.
TPs unable to meet the 3-year track record must employ at least two key personnel with a minimum of five years of experience in securities trading at a local or World Federation of Exchanges (WFE) member stock exchange.
The revised rules clearly define the strict operational obligations of accredited Market Makers, which include maintaining maximum bid-ask spreads, meeting minimum quote sizes, and adhering to required presence times during live trading sessions.
To encourage participation, the PSE is introducing a suite of competitive incentives for compliant Market Makers that were not available under previous rules. Subject to commercial agreements, these incentives may include:
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Clearing fee concessions
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Price quoting services
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Connectivity and infrastructure support
The PSE invites all market participants and stakeholders to review the draft. The proposed rules are currently available for download on the official PSE website (www.pse.com.ph).
Stakeholders have until June 23, 2026, to submit their feedback. All comments received will be carefully reviewed and considered for the final version of the amendments before they are submitted to the SEC for formal approval.
