Philippines SEC formally joins Asean CIS framework

WITH the recently concluded virtual signing of the Association of Southeast Asian Nations (Asean) Collective Investment Schemes (CIS) Framework last May 11, the Securities and Exchange Commission (SEC) Philippines has become the fourth signatory to be admitted to the Asean CIS Framework, through a signed supplemental memorandum of understanding between the Securities Commission Malaysia, the Monetary Authority of Singapore and SEC Thailand with the SEC Philippines.

The entry of the Philippines into the framework is the latest step toward enhancing capital market connectivity in the region, wherein qualified investment companies in the Philippines and their fund managers will now be able to offer eligible funds to retail investors in the other three member jurisdictions and vice versa.

The Asean CIS Framework, one of the initiatives organized by the Asean Capital Markets Forum, was a part of the regional capital market integration plan endorsed by the Asean Finance Ministers in 2009 to facilitate cross-border product access and fund distribution for investors and issuers, respectively. This framework also enables fund managers, operating in a signatory jurisdiction, to offer CIS or funds constituted and approved in that jurisdiction to retail investors in other signatory jurisdictions under a streamlined authorization process.

Apart from mutual funds, CIS are arrangements in which funds are solicited from the investing public and pooled to invest, reinvest and/or trade in securities and other assets.
Fund managers using this framework will have to abide by a set of common standards or the “Standards of Qualifying CIS,” designed to ensure that the retail funds are managed based on industry best practices.

As Chairman Emilio Aquino noted: “We deeply appreciate the tireless efforts and dedication of SC, MAS and SEC Thailand in facilitating the admission of the Philippines into the Asean CIS Framework, especially the members of Asean CIS Working Group B who played important roles in achieving this significant milestone, thereby allowing us to participate and be able to showcase our collective investment schemes.”

According to a recent report prior to the event by the SEC Philippines to the Capital Market Development Council, a coordinating body tasked to facilitate the development of the Philippine capital market, Director Rachel Gumtang-Remalante, head of SEC’s Corporate Governance and Finance Department, mentioned that: “The entry of the Philippines to this framework would pave the way for strengthening the connectivity of our capital markets and accelerating their growth. Retail investors, on the other hand, can benefit from the broader range of investment products that will be offered to them once the CIS framework is implemented here.”
As I personally noted on the importance of a fintech company with good corporate governance: “The commission is committed to being your dynamic partner in the continuously changing fintech landscape. We look forward to partnering with all of you to allow fintech to thrive in the country.”

“Even though I am here encouraging you to implement good corporate governance principles, don’t implement corporate governance simply for the sake of compliance with our rules. That would not be the right mindset. Do it because corporate governance is the cornerstone of any good and ethical business whether you are fintech or not. And don’t forget, many academic studies have already proven that well-governed companies, companies with good corporate governance such as yourselves, perform better and are more successful.”

Allow me to thank both the ICD and Fintech Alliance as well as other business organizations and entities for supporting all of SEC’s initiatives. Your help and support are always greatly appreciated.

Source:  Manila Times