The Monetary Board (MB) approved the reduction of the minimum account opening amount for investment management activities from P1 million to any lower amount, subject to a floor of P100,000, the Bangko Sentral ng Pilipinas (BSP) said on Wednesday.
The policy amendment aims to expand the investment opportunities of the public by reaching markets that may not have been able to open investment management accounts (IMAs) due to the high entry requirement.
“Through our forthcoming issuance, we hope that more savers will transition into investors,” stated BSP Governor Benjamin E. Diokno. “This is in line with the goal to make financial services more accessible to the public.”
Another feature of the new policy that is the reduction of the required investment of each IMA in a commingled fund from P1 million to P100,000. This is aimed at increasing the participation of retail investors in the securities markets through IMAs. Furthermore, commingled funds can now invest in a wider range of financial assets, which includes exchange-traded equities and fixed income securities and commercial papers registered with the Securities and Exchange Commission and securities issued by banks incorporated in the Philippines. Likewise, corporate accounts can now participate in commingled funds.
Trust entities are expected to have the operational capability to manage accounts participating in commingled funds and are required to fully disclose to clients the risks associated with the same. This includes the risk that assets in a commingled fund may not, at times, be easily divested at favorable market prices.
The amendments are expected to support the growth of the trust industry while underscoring the importance of consumer protection. Governor Benjamin Diokno said, “As always, we aim to strike a balance between liberalization and prudence. There are more changes in trust regulations in the pipeline and we hope that the industry will welcome these changes as well.”