Date of Publication: 9 September 2026
The Securities and Exchange Commission (SEC) is seeking public comments on its Proposed Amendments to Rule 48.1 (Margin) of the 2015 Implementing Rules and Regulations of the Securities Regulation Code (SRC). The draft circular would replace SRC Rule 48.1 in its entirety and introduce a principles-based and risk-sensitive framework for margin financing by broker-dealers.
The SEC En Banc approved the exposure of the draft on 25 August 2026. The proposed amendments have not yet taken effect. Written comments may be submitted to the SEC on or before 15 September 2026.
The proposal is intended to make margin regulation more responsive to the liquidity, volatility, settlement risk, and other characteristics of different securities while maintaining minimum prudential safeguards.
A Principles-Based Margin Framework
Under the proposed framework, the SEC would establish minimum prudential standards, while the Philippine Stock Exchange (Exchange) would develop and administer more detailed operational requirements through Exchange Margin Trading Rules. The Capital Markets Integrity Corporation (CMIC), meanwhile, would supervise and enforce broker-dealer compliance within its delegated authority.
The proposed Rule would govern the extension of margin financing by broker-dealers, the designation of margin-eligible securities, minimum prudential standards, and the respective responsibilities of the SEC, the Exchange, CMIC, and broker-dealers. It would supplement the SRC and existing SEC and Exchange requirements rather than establish a separate licensing or supervisory regime for firms providing margin financing.
Material Exchange rules and amendments would remain subject to prior SEC approval.
Within 90 calendar days from the effectivity of the final Rule, the Exchange would be required to submit its Margin Trading Rules to the SEC for approval. These rules may cover customer qualification, disclosures, margin financing agreements, collateral administration, margin calls, liquidation procedures, recordkeeping, internal controls, securities borrowing and lending, cybersecurity, and business continuity.
The Exchange may prescribe different requirements for different classes of margin-eligible securities, provided that these do not fall below the minimum standards established by the SEC. The methodology used would also be subject to periodic back-testing and independent validation, with results reported to the SEC at least annually.
Requirements for Broker-Dealers
Only broker-dealers authorized under the SRC and applicable SEC and Exchange rules would be permitted to provide margin financing. They would be required to satisfy applicable financial and prudential requirements and maintain adequate risk-management systems, internal controls, and operational capabilities.
Under the proposed transitional requirements, a broker-dealer could provide new margin financing or increase an existing margin account only if it has at least ₱150 million in unimpaired paid-up capital, complies with applicable risk-based capital requirements, has incurred no Exchange penalty for a major violation during the preceding two years, and possesses adequate operational and risk-management capabilities.
A broker-dealer would also be required to maintain written credit, monitoring, compliance, recordkeeping, and risk-management policies appropriate to the nature and scale of its margin financing business.
Interim Margin Requirements
Pending the effectivity of the Exchange Margin Trading Rules, margin financing would generally be limited to equity securities included in the PSE Composite Index or MSCI Philippines Index, as well as other equity securities or classes that the Exchange may designate under SEC oversight. Other classes of securities would remain ineligible until formally designated under the new framework.
Under the proposed interim requirements, a broker-dealer could extend credit of up to 60% of the current market value of a margin-eligible security at the time of the transaction.
A customer seeking new margin financing or an increase in an existing margin account would be required to maintain equity of at least ₱50,000. The maintenance margin could not be less than 30% of the current market value of the margin-eligible securities. Broker-dealers would remain free to impose stricter house requirements.
Margin Calls and Liquidation
If account equity falls below the applicable maintenance margin, the broker-dealer would be required to issue a margin call promptly.
Unless the margin financing agreement or the broker-dealer’s house rules prescribe a shorter period, the customer would have three trading days from receipt of the margin call to restore the required margin.
Failure to satisfy the margin call within the applicable period could result in liquidation of securities or other collateral without further notice or prior consent, subject to the margin financing agreement and applicable law. Any remaining deficiency would continue to be the customer’s obligation. The broker-dealer would also be required to report the liquidation and status of the account by the next business day.
Treatment of Existing Margin Accounts
Existing margin accounts could continue under their existing agreements. However, new margin financing and increases in existing margin accounts after the effectivity of the final Rule would have to comply with the new requirements and applicable transitional provisions.
Existing house margin, credit, compliance, and risk-management policies would remain effective, and broker-dealers could continue to impose requirements stricter than the regulatory minimum.
Preparing for the Proposed Framework
If adopted substantially in its present form, the proposed amendments would shift Philippine margin regulation toward a more flexible, risk-sensitive framework while giving the Exchange a greater role in developing detailed operational requirements, subject to SEC oversight.
Broker-dealers that currently provide or intend to provide margin financing should assess whether they would satisfy the proposed ₱150 million capital threshold and other prudential requirements. They should also review their existing margin agreements, credit and risk-management policies, margin-call and liquidation procedures, internal controls, operational systems, and customer disclosures against the proposed framework.
Market participants should likewise monitor the Exchange Margin Trading Rules that would follow the adoption of the SEC Rule, as these are expected to contain much of the detailed operational framework governing margin financing.
Interested parties may submit comments on the proposed amendments to the SEC on or before 15 September 2026.
The SEC request for comments may be accessed here.