BSP to Expand Trust Products That Financial Institutions May Sell
The Bangko Sentral ng Pilipinas (BSP) is expanding the roster of trust products that banks and non-banks can market and sell in a new set of guidelines.
The revised trust circulars are still in the review stage, but BSP Governor Amando M. Tetangco Jr. described these new policies as an "open architecture" type of setup.
The most significant changes that will be implemented in the trust policies are taxation and the cross-selling or distribution and marketing of trust products using bank networks.
Tetangco is confident that these reforms and ongoing regulatory review will allow banks to introduce new trust products and other financial products and services. There are limitations in the existing cross-selling circulars that are preventing banks to sell these products through bank branches.
Last month, the BSP released a new circular on the unit investment trust funds (UITF) which amended provisions on investor funds such as feeder funds, funds-of-fund and target fund.
The changes "relaxed" the existing rules on unit investment trusts as a feeder fund or funds-of-fund. A feeder fund is a UIT fund structure that mandates the fund to invest at least 90 percent of its assets in a single collective investment scheme while a funds-of-fund are assets in more than one collective investment scheme.
As part of the trust regulatory reforms, Tetangco said the BSP is also reviewing the licensing framework of trust businesses.
In August the BSP's Monetary Board approved amendments to the existing trust regulations to strengthen the governance standards and risk management practices for "Trust, Other Fiduciary Business, and Investment Management Activities" of banks and non-bank financial institutions. …