PSE to change rules on securities borrowing, lending

February 7, 2026 | 12:00am

MANILA, Philippines — The Philippine Stock Exchange Inc. (PSE) is seeking to amend its rules on securities borrowing and lending (SBL) to align with global processes and mechanisms.

The proposed amendments aim to incorporate a framework for execution of offshore SBL transactions involving PSE-listed securities.

The PSE said the initiative is being undertaken not only to align with global SBL processes and mechanisms, but also to induce foreign participation in its SBL program.

Under the current global SBL framework, the PSE said that foreign lenders lend out their securities to foreign borrowers directly or through a foreign/offshore-lending agent, while a third party collateral manager or the foreign lender/lending agent manages collateral.

However, the exchange said that while the current SBL rules allow SBL transactions between foreign lenders/lending agents and foreign borrowers, it does not provide for a situation where the SBL transaction, including delivery and management of collateral, will be done purely offshore, and only the delivery of borrowed securities will take place in the Philippines.

“In this regard, PSE proposes to allow an onshore lending agent registered as such with the Securities and Exchange Commission to facilitate the Philippine leg of SBL transactions between foreign lenders and foreign borrowers involving PSE-listed securities, but carve out collateral management from the functions and responsibilities of the onshore lending agent,” the PSE said.

Under the proposed amendments, the execution of offshore bilateral SBL transactions will be via directed pooled lending as far as the mode of execution of offshore SBL transactions goes.

For the delivery of collateral and collateral management, collateral is delivered to and managed by offshore third party collateral manager if it is non-cash collateral or foreign/offshore lender/lending agent if it is cash collateral.

A third party collateral manager or foreign/offshore lender/lending agent executes default procedures, while non-defaulting party, whether lender or borrower, through its onshore representative, notifies the onshore lending agent of an event of default to close out the loan in the onshore lending agent’s system.

The PSE or its authorized representatives will have the right to inspect or audit the participant’s SBL system, books and records during normal business hours to determine compliance with the rules.

The PSE is giving Interested parties until Feb. 18 to submit their comments and requests for clarifications on the proposed amendments.