The Philippines regulator published a memorandum earlier this week, setting out rules on the authorisation of investment companies to qualify under the Southeast Asian Nations (Asean) Collective Investment Schemes (CIS) framework.
Under the scheme, a qualified Philippine investment firm can offer shares in their unit trust funds and mutual funds to retail investors in Malaysia, Singapore, and Thailand.
However, “only shares issued by qualified investment companies from the Philippines will be allowed to be offered under the CIS framework. Investment companies offering both shares and units are still eligible to participate in the framework but only shares can be offered cross-border,” the commission said.
An investment company must be incorporated under the laws of the Philippines and authorised under the Investment Company Act and Securities Regulation Code to issue shares to the public
The company should also be fully compliant with both local regulations and the standards of qualifying CIS, said SEC.
Asean funds sold in the Philippines
Similarly, foreign CIS have to abide by the same rules before they are made available to Filipino investors.
Moreover, overseas CIS operators must appoint a mutual fund distributor, a fund manager, or a securities broker as a local representative for each foreign CIS, who is responsible for liaising between the CIS, the SEC, and investors.
They must also appoint one or more local distributors for the foreign fund to be offered, marketed, and distributed in the Philippines.
Upon submission of complete documents, the SEC will review and assess the application of qualifying CIS within 21 business days.
The 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.
It was launched in 2014 by founding members Malaysia, Singapore and Thailand. The Philippines joined the Asean CIS framework in May this year.
