A Board Without a Market Is Just a List
The Philippine Stock Exchange’s ambition to create a separate listing board for emerging technology companies runs directly into a structural problem that no listing rule can solve on its own. PSE President and CEO Ramon S. Monzon acknowledged the constraint in March 2026: technology firms that have not yet demonstrated profitability may have no trading record, and without market makers willing to quote both a bid and an ask, a listing board risks becoming a registry of untraded symbols.
Monzon’s phrasing captured the paradox: “But there’s nothing to buy. There’s no market”. The exchange has been approaching large and multinational brokers to serve as market makers for the proposed board, recognizing that the success of the venture depends less on listing standards than on whether liquidity can be manufactured where none currently exists.
Relaxed Listing Rules Raise the Liquidity Stakes
The proposed tech board is designed to relax requirements such as profitability, allowing smaller technology-focused companies—motorcycle-taxi platforms, payment processors, digital banks—to access capital that might otherwise be raised overseas. Relaxing entry standards without a corresponding liquidity mechanism would concentrate risk in exactly the segment of the market least able to absorb it: early-stage firms with uncertain earnings and limited public float.
Market making changes the risk profile by placing a continuous quotation obligation on an accredited intermediary. The intermediary absorbs temporary imbalances and provides an exit price, but it does so at a cost. The tighter the required spread relative to the volatility of an unproven technology stock, the less attractive the economics become for the market maker.
The Inventory-Risk Calculus
The PSE’s broader market-making framework, released for comment in June 2026, sets the accreditation terms that would govern tech-board specialists: SEC-registered broker-dealer status, PSE trading participant standing, ₱100 million in unimpaired paid-up capital, and a three-year operating record or equivalent personnel experience. The framework also requires maximum bid-ask spreads and minimum quote sizes, which must be calibrated for instruments with no historical price range.
That calibration problem is acute for technology listings. A market maker quoting a stock with no trading history has no reliable volatility benchmark to price inventory risk. If the spread is set too wide, the listing appears illiquid and deters investors. If it is set too tight, the market maker absorbs losses during periods of order imbalance.
Why the Tech Board Is a Test Case
The PSE’s tech-board initiative turns market making into a precondition for capital formation rather than a secondary trading convenience. The exchange is not simply asking brokers to quote a mature index constituent; it is asking them to create a market for companies whose public-market viability is unproven. Monzon’s approach—seeking commitments from large brokers before the board launches—reflects an understanding that the sequencing matters: without liquidity providers, the listing rules are inert.
The outcome will shape how the Philippine market treats early-stage technology issuance for years. If market makers can be secured on economically viable terms, the tech board becomes a template for listing segments that the main board cannot accommodate. If not, the initiative risks demonstrating that relaxed listing standards without a liquidity backstop merely relocate the valuation problem rather than solving it.
