DOF backs SEC push for market liquidity

The Department of Finance (DOF) welcomed the Securities and Exchange Commission’s (SEC) new rules for market makers, saying the framework could improve liquidity, attract more investors, and help businesses raise funds through the Philippine capital market.

In a Saturday statement, Finance Secretary Frederick Go said the reform could channel more private investment into productive sectors, support job creation, and promote long-term economic growth.

“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,” Go said.

Under SEC Memorandum Circular No. 28, Series of 2026, issued on 15 October, qualified trading participants may engage in market making for equity and fixed-income securities, helping investors buy and sell securities more efficiently.

The new SEC rules state that securities trading firms with at least P150 million in unimpaired paid-up capital may qualify as market makers, helping increase trading activity and improve liquidity in the local capital market.

Only trading participants accredited or recognized by the relevant exchange may serve as market makers. They must have at least P150 million in unimpaired paid-up capital, or a higher amount set by the SEC.

Each accredited firm must also designate at least one specialist with at least three years of relevant experience in securities trading or market making. The SEC may accept equivalent qualifications based on certifications, training, and demonstrated proficiency.

To encourage participation, exchanges must offer incentives such as reduced transaction fees, liquidity rebates, and enhanced access to trading facilities. They will also determine which securities qualify for market making based on the needs of different market segments.

The rules include disclosure, recordkeeping, and reporting requirements, as well as safeguards to protect investors and preserve market integrity.

Previously, self-regulatory organizations implemented their own market-making policies under SEC supervision. The new framework establishes a common regulatory baseline across exchanges, bringing Philippine rules closer to international standards.

The DOF said the initiative forms part of the government’s broader efforts to deepen the domestic capital market, expand businesses’ access to long-term financing, mobilize private investment, and support economic growth.

The department added that it would continue working with the SEC and other financial regulators on reforms to strengthen the Philippine financial system.