BANOKO Sexrnau Ne PILIPINAS
OFFICE OF THE GOVERNOR
clRcurAR No.llgq
Series of 2021-
Subject: Amendments to the Regulations on Investment Management Activities
The Monetary Board, in its Resolution No. 77 dated 21 January 202t, approved the
amendments to the regulations under the Manual of Regulations for Banks (MORB) and the
Manual of Regulations for Non-Bank Financial lnstitutions (MORNBFI) to reduce the minimum
size of an account, and expand the securities eligible as investment outlet for commingled
funds under investment management.
Section 1. Section 415 of the MORB and Section 41.5-Q of the MORNBFI are hereby amended
to read,as follows:
"4t514t5-Q TNVESTMENT MANAGEMENT ACItVtTtES
The.conduct of investment management activities shall be subject to the
following regulations.
Minimum docu mento ry requi rements. xxx
Minimum size of each investment monogement occount (tMA). BSFIs may
determir6 the minimum amount that should be maintained by a client in an IMA:
Provided, That the same shall at least be P100,000: Provided further,That the initial
contribution and the carrying balance shall not fall below the said amount, except in
cases where the reduction is due to investment losses and/or fund management fees,
BSFIs should consider the adequacy of their risk management processes and
operational capabilities in setting the minimum amount for their lMAs.
Commingling of funds. For purposes of this regulation, commingling of funds
shall refer to the act of combining funds from multiple lMAs for the sole purpose of
investing in qualified asset/s enumerated under item "b" below. Funds from lMAs may
be commingled: Provided, That allof the following conditions are met:
a. The investment of each of the lMAs in the commingled fund shall at least be
P1.00,000;
b. The commingled funds shall only be invested in (i) securities directly issued by the
Philippine National Government, (ii) exchange-traded equities and fixed income
securitiesl and commercial papers , Provided, That these securities/papers are
registered with the Securities and Exchange Commission, (iii) securities issued by
banks incorporated in the Philippines, except those issued through the trust units,
1
including those issued offshore
7,1,i . r,,l,i
or (iv) securities issued by other sovereigns that are exempt from registration
under Section 9(b) of the Securities Regulation Code;
The commingling of funds and the manner of termination of the same shall be
specifically agreed in writing by the clients. The investment manager should
ensure that the agreement to commingle funds with other lMAs is legally binding
and enforceable. Furthermore, the risks associated with commingling of funds,
such as market liquidity risk, shall be fully disclosed to the clients;
d. The investment manager shall determine that it possesses the operational
capability to manage the accounts participating in commingled funds. In doing so,
the investment manager shall undertake an assessment taking the following into
consideration: (i) sufficiency of personnel handling commingled lMAs; (ii)
capability of existing systems to accurately and readily identify the allocation of
each investor in a commingled fund and generate the following information on a
per IMA basis, at a minimum: accruals, coupons received, dividends received,
mark-to-market gains or losses and required reports; and (iii) ability to conduct
periodic reconciliation of relevant records; and
e. The maximum number of lMAs that can be commingled into one fund shall be
determined by the investment manager based on its own operational capability
to commingle lMAs.
An investment manager shall have adequate policies, procedures, and control
mechanisms to ensure that the conditions for commingling set forth in this Circular
are consistently complied v0ith.
Lending and investment disposition. xxx
xxx'
Tax-exempt individuol investment monagement occounts.The following shall
be the features/requirements of lMAs of individuals which may be exempted from
the twenty percent (20%) final tax under Section 24(BX1) of R.A. No. 8424 (The Tax
Reform Act of 1997):
A. XXX
b. The minimum amount of investment for an IMA shall be the amount
prescribed by the BSFls, but not lower than P100,000;
xxx"
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a
Section 2. ltem 7 on "Advice of Counsel" of Appendix Q-18 of the MORNBFI is hereby deleted.
Renumbered ltem 10 of Appendix Q-18 of the MORNBFI and ltem 10 of Appendix 21 of the
MORB on "Withdrawal of Income/Principal" are hereby amended to read, as follows:
"Appendix 2U Q-18 SAMPLE INVESTMENT MANAGEMENT AGREEMENT
(Appendix to Sec. 415/415-Q on Minimum documentary requirements)
xxx
WITHDRAWALS FROM THE PORTFOLIO
(10) Withdrawal of Income/Principal - Subject to availability of funds and
the non-diminution of the Portfolio below (the amount prescribed by the trust
entity, but not lower than P100,000), the Principal may withdraw the
income/principal of the Portfolio or portion thereof upon written instruction or
order given to the Investment Manager. xxx
xxx"
Section 3. This Circular shall take effect fifteen (1.5) calendar days following its publication in
the Official Gazette or in any newspaper of general circulation in the Philippines.
FOR THE MONETARY BOARD:
c. \'
BENJAMIN E. DIOKNO
Governor
fg Frhr\^aYv 2s21
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