Philippine investment companies that plan to offer collective investment schemes (CIS) through the Asean CIS Framework have to register under the Investment Company Act as well as the Securities Regulation Code to sell units to investors overseas, according to the Securities and Exchange Commission (SEC).
The SEC said foreign entities that intend to sell CIS units into the Philippines under the same framework must first be assessed by their home regulator as and by the local SEC as fit to sell their investment scheme in the country.
The rules are part of the draft regulation the SEC is looking into for the Asean CIS that will allow sale of local investment schemes between the Philippines, Malaysia, Singapore and Thailand.
The Asean CIS Framework is an initiative under the regional capital markets integration plan endorsed by the Asean Finance Ministers in 2009 to facilitate cross-border product access and fund distribution for investors and issuers respectively.
Under the draft rules, only shares will be allowed to be issued by qualified investment companies from the Philippines for cross-border selling, the SEC said.
The investment company will then be assessed by the SEC as compliant to both local regulations and the Standards of Qualifying CIS, or the set of rules and regulations. A foreign CIS meanwhile will be required to appoint a registered entity with a mutual fund distributor license to act as local representative and distributor/s in the Philippines for each foreign CIS that is to be offered, marketed, and distributed in the country.
The local distributor of the foreign CIS will have the responsibility of offering, marketing, or distributing the foreign CIS in the country. It will also be required to keep a register of investors that will be readily available to the SEC. – Ruelle Castro
