SEC considers opening repo market to nonbanks

The Securities and Exchange Commission (SEC) is considering expanding the Government Securities (GS) Repurchase Agreement (Repo) Market to include nonbank financial institutions, citing renewed interest among financial players in repo transactions.  

SEC Chairperson Emilio Aquino said on Tuesday that widening market participation could improve liquidity, enhance short-term funding management, and boost overall market activity.

“The Repo Market is envisioned to support the market-making activities of government securities dealers in the country. Expanding this market provides us another opportunity to improve liquidity, manage short-term funding, and boost overall market activity,” Aquino said. 

Last year, the SEC-backed industry calls to expand the Documentary Stamp Tax exemption for all derivative market players, leading to the issuance of Revenue Memorandum Circular (RMC) No. 125-2024. 

The amended RMC No. 95-2017, which governed the tax treatment of GS repo transactions under the Global Master Repurchase Agreement, paving the way for a functional Repo Market in the country.  

To support the initiative, the SEC partnered with the Bankers Association of the Philippines and the Asian Development Bank to hold a GMRA-Based Repo Workshop at the SEC Headquarters from 19 to 21 February, drawing over 600 participants. 

Simultaneously, the SEC also works on identifying the most suitable Self-Regulatory Organization for the Repo Market to ensure its long-term viability.