- August 7, 2018
- Posted by: Atty. James Biron
- Categories: Banking, Commercial, Legal News
The Securities and Exchange Commission (SEC), heeding a petition from fund managers, will issue a new ruling which allows Unit Investment Trust Funds (UITFs) and alike trust entities to participate in security deals open only to selected institutional investors.
SEC Commissioner Ephyro Luis Amatong said recently in an interview that the regulation would classify similar trust entities also with UITFs as Qualified Institutional Buyers (QIBs).
UITF is a professionally managed collective investment vehicle which, unlike mutual funds, are not incorporated, and structured only as a product of a bank’s department or a trust corporation.
Trust companies are classified under the law as QIBs but Amatong said that UITFs fell within the gap as they are not trust companies. He also said that they will be given access to QIBs bond only for issuances.
QIBs are exempt from SEC registration for purchasing funds or securities locally or abroad. Supposedly, they are familiar with their investments; thus, the unregistered seller of securities or funds do not need to register with the SEC.
Though UITFs have been created some time ago, its non-recognition as QIB restricted them from certain investment opportunities enjoyed by other professionally-managed funds.
One of the services made by the Philippine Dealing & Exchange Corp. (PDEx) was a QIB board, he also said. Thus, trading among QIBs will be facilitated by PDEx and trust entities can participate, UITFs can participate.
QIB-classified entities include banks, insurance companies, registered investment houses, retirement plans or pension funds maintained by the government, any political subdivision or are managed by a bank or other persons authorized by the Bangko Sentral ng Pilipinas.
Image source: Conceptu Sur
