SEC opens market to structured warrants

To expand investment options

MANILA, Philippines — The Securities and Exchange Commission (SEC) is broadening the range of investment products available to investors in the country by introducing structured warrants.

The commission has issued the rules and regulations governing the registration and trading of structured warrants through Memorandum Circular 27, Series of 2026.

SEC chairperson Francis Lim said the issuance of the rules marks a major milestone in the commission’s ongoing efforts to deepen and modernize the Philippine capital market.

“By introducing structured warrants, we are providing investors with a sophisticated tool for risk management, hedging and portfolio diversification, bringing our market architecture at par with our ASEAN peers,” Lim said.

The SEC defines a structured warrant as a financial product issued by a third-party financial institution that gives the holder the right, but not the obligation, to buy or sell an underlying financial instrument, or to receive a cash settlement at a predetermined price.

The rules state that only licensed broker-dealers and investment houses incorporated in the Philippines, or foreign corporations duly licensed to do business in the country, may issue structured warrants.

An issuer or its guarantor must maintain a minimum unimpaired paid-up capital of P400 million at all times while any structured warrants remain outstanding.

Eligible underlying financial instruments include single equities listed on a Philippine or foreign stock exchange, securities indexes and exchange-traded funds.

They may also include debt securities listed on a Philippine or foreign exchange, baskets of listed equities or listed debt securities, or other assets or reference values as may be prescribed by the SEC.

Under the rules, all underlying financial instruments should be listed on an exchange in good standing and comply with liquidity, market capitalization and trading volume requirements, as well as other criteria prescribed by the exchange.

The minimum issue size for structured warrants is P20 million.

Structured warrants carry a maximum tenor of three years from the date of issuance, unless a longer period is allowed by the SEC.

If structured warrants have been fully exercised before expiry or maturity, the issuer shall notify both the SEC and the exchange as soon as practicable to facilitate delisting.

An issuer may also apply to withdraw the listing before expiry or maturity, provided that the issuer or its appointed market maker holds all structured warrants, and the public holds no warrants at the time of the application.