The Securities and Exchange Commission (SEC) has released a draft Memorandum Circular proposing a complete overhaul of SRC Rule 48.1, replacing a static 2015 framework with a modern, risk-sensitive margin trading structure for the Philippine stock market. Public feedback on the proposal remains open until September 15, 2026.
Key Changes in Proposed Margin Rules
The proposed reforms shift the market away from fixed borrowing formulas toward a dynamic “Risk-Sensitive Margin Methodology” calculated by the Philippine Stock Exchange (PSE) based on asset volatility and liquidity. Under the draft guidelines, investors gain higher initial borrowing power alongside standardized liquidation timelines.
| Rule Feature | 2015 SRC Rule 48.1 | Proposed 2026 Draft |
| Max Borrowing Limit | Up to 50% of security value | Up to 60% of security value (40% initial equity) |
| Maintenance Margin | Min. 25% equity for long positions | Flat 30% minimum equity requirement |
| Margin Call Cure Period | 24 hours (maintenance) / 5 days (initial) | Standardized 3 trading days |
| Eligible Equities | Standard listed securities | Restricted to PSEi and MSCI Philippines Index stocks |
| Broker Capital Threshold | Standard RBCA guidelines | ₱150M unimpaired capital + clear 2-year record |
Strict Safeguards and Broker Standards
To limit market risks, credit extension during the transition is strictly restricted to constituents of the PSE Composite Index (PSEi) and MSCI Philippines Index. Customers must maintain a minimum account equity of ₱50,000. If an account drops below the 30% maintenance margin, brokers issue a margin call giving clients three trading days to deposit funds before the firm has the legal right to liquidate collateral without prior consent.
Broker-dealers offering margin lines must meet a higher threshold, requiring at least ₱150 million in unimpaired paid-up capital, compliance with Risk-Based Capital Adequacy (RBCA) rules, and a clean two-year margin compliance record.
Status of Virtual Assets
The proposed draft makes no mention of cryptocurrencies, virtual assets, or digital tokens. Margin trading is strictly confined to traditional equities. While Section 48.1.1(e) defines collateral as cash, margin-eligible securities, or “such other assets as may be recognized under the Exchange Margin Trading Rules,” virtual assets remain entirely excluded from collateral or marginable status under current provisions.
This article is published on BitPinas: SEC Proposes SRC Rule 48.1 Overhaul to Modernize Philippine Stock Market Margin Trading Rules
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