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BSP expands distribution channels of trust corporations for UITFs

The Bangko Sentral ng Pilipinas‘ (BSP’s) Monetary Board approved the guidelines that will allow trust corporations to distribute their UITFs through third parties, specifically individual and institutional agents.  This initiative supports the BSP’s advocacy to promote financial inclusion by broadening access points to innovative financial products and services.

According to BSP Governor Benjamin Diokno, “Through this policy, agents are expected to bring products closer to investors. At the same time, it is an opportunity for the industry to grow assets under management through partnerships with distributors. More products in the market will also bode well for capital market development.”

Trust corporations currently distribute their UITFs through their main offices.  The rules therefore provide other channels that may be used by trust corporations to offer their products. For this purpose, third-party providers must abide by stringent qualification standards in order to qualify as distributors.

Individual agents and employees of institutional agents are required to meet the qualifications for UITF marketing personnel in existing regulations while institutional agents must be reputable and duly licensed by appropriate regulatory agencies to distribute financial products.

The provisions in the forthcoming policy are anchored on the governance mechanisms and due diligence requirements under the existing outsourcing framework for BSP-supervised institutions. These ensure that TCs will only tap entities that have a sound understanding of UITFs and are well-regulated and have the necessary infrastructure to distribute UITFs.

This development is part of the set of reforms being undertaken by the Bangko Sentral to promote the growth of the trust industry. Along this line, the BSP is set to revamp the regulatory framework for trust, investment management and other fiduciary accounts by clearly laying out the expectations for the different activities performed by trust entities and streamlining regulatory requirements.

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