The Philippine Stock Exchange (PSE) Inc. proposed a uniform framework for all market-making operations, moving to revive thin trading volumes and expand liquidity tools beyond exchange-traded funds (ETFs).

The draft rules seek to institutionalize a standardized system for brokers to continuously provide two-way quotes, according to the consultative document published by the bourse. The initiative targets structural illiquidity on the local exchange by making it simpler to introduce market-making across a broader array of financial instruments, including Global Philippine Depository Receipts, individual equities, and other exchange-traded products.

“Having a main framework will make it easier and more efficient for us to craft product-specific market-making rules when needed,” Ramon S. Monzon, PSE president and chief executive officer said in the document. He noted that the exchange updated the guidelines based on global industry standards to ensure a continuous pool of liquidity in the stock market.

Under the proposed guidelines, brokers seeking accreditation as market makers must be registered with the Securities and Exchange Commission (SEC) and hold status as a PSE trading participant. The bourse is introducing strict financial and operational bars to entry, requiring applicants to possess unimpaired paid-up capital of at least ₱100 million and a clean three-year operating history immediately preceding their application.

Firms failing to meet the three-year operational track record may still qualify if they employ at least two key personnel who each possess a minimum of five years of securities trading experience on a local exchange or a bourse affiliated with the World Federation of Exchanges.

The draft framework sets clear baseline obligations for designated market makers, establishing maximum allowable bid-ask spreads, mandatory minimum quote sizes, and strict time-presence requirements during active trading hours. Actual market-making functions will be restricted to accredited designated specialists working under an active agreement executed between the market maker and either the asset issuer or the exchange itself.

Brokers will be permitted to manage market-making accounts for multiple financial products simultaneously, provided individual agreements remain valid. Once a specific contract expires, the market maker must immediately cease entering market-making orders for that designated security.

To incentivize participation, the PSE plans to introduce a suite of commercial perks for compliant participants. These incentives, which were absent in previous iterations of the rules, will be determined via commercial agreements and may include concessions on clearing fees, data and price-quoting privileges, and specialized technical connectivity support.

Because market-making units operate within full-service stock brokerages, the regulations mandate strict information barriers. Firms must enforce the absolute segregation of duties to prevent the unauthorized flow of data between their designated specialists and retail or institutional sales desks, neutralizing potential conflicts of interest. The framework explicitly requires designated specialists to execute transactions without exposing proprietary data or compromising client account information, mandating the use of separate, dedicated market-making accounts.

Market stakeholders and the public have until June 23, 2026, to submit formal comments via the exchange's website. The PSE will review the feedback before submitting a finalized version of the amendments to the SEC for ultimate regulatory approval.