The Philippine Stock Exchange (PSE) has proposed a negotiated trades facility to address a long-standing gap in the local equity market. The proposed facility would allow certain legitimate pre-arranged transactions that cannot be executed under the exchange’s existing trading rules.
According to experts, the PSE’s proposal is a constructive and timely market structure reform that addresses a significant execution gap in the Philippine equity market. This gap currently prevents pre-arranged transactions from being executed efficiently if they fail to meet specific requirements, such as minimum size or price thresholds.
Under the existing framework, regular block sales require a minimum transaction value of P20 million, while special block sales require a minimum transaction value of P50 million. Transactions below these thresholds may instead be executed as cross transactions, provided the agreed price falls within the best bid and offer. However, there is currently no mechanism for executing pre-arranged trades that satisfy neither requirement.
The proposed facility would have no minimum value or volume requirement and would allow negotiated trades to be executed during a 15-minute window after the Run-Off/Trading-at-Last session. The facility would be subject to specific pricing boundaries and a one-firm trade requirement, which would provide greater flexibility without compromising market integrity.
Industry experts have welcomed the proposal, noting that it would allow for more flexibility and transparency in negotiated trades. The exchange is accepting comments from trading participants and other stakeholders until July 7, providing an opportunity for feedback and input on the proposed facility.
