Philippines releases rules on Asean cross-border investments

The Philippines Securities and Exchange Commission (SEC) on Tuesday said it has issued the rules for cross-border investments within the Association of Southeast Asian Nations (Asean), which will allow qualified local investment companies to offer their shares to Malaysia, Singapore and Thailand, and vice versa.

In a statement, the commission said the issuance of new rules will support the implementation of the Asean Collective Investment Schemes (CIS) Framework.

The Asean CIS Framework allows fund managers of a member jurisdiction to offer CIS, such as unit trust funds or mutual funds, to retail investors in other member jurisdictions under a streamlined authorization process.

The commission issued SEC Memorandum Circular 9, Series of 2021, or the Rules on Authorisation of an Investment Company as a Qualifying CIS and Recognition of a Foreign CIS under the Asean CIS Framework on August 16.

SEC said the rules operationalizes the Supplemental Memorandum of Understanding signed by the commission, the Securities Commission Malaysia, the Monetary Authority of Singapore and the SEC of Thailand on May 11, 2021.

"Only shares will be allowed to be issued by qualified investment companies from the Philippines. Those offering both shares and units are still eligible to participate in the framework but only shares can be offered cross-border," the commission continued.

The company should also comply with both domestic regulations and standards of qualifying CIS, according to SEC.

Meanwhile, SEC said a foreign CIS may be offered in the country under the framework if it is constituted and authorized to be offered to the public of a member jurisdiction, has been assessed by its home regulator as qualifying CIS and is recognized and permitted to be offered in the Philippines.

"The foreign CIS must be concurrently offered in the Philippines and in its home jurisdiction; must comply with the Standards of Qualifying CIS, along with its CIS operator and trustee/fund supervisor; and must comply with the disclosure requirements of the SEC, among others," the commission added.

The operator of foreign CIS is also required to appoint a local representative in the country in relation to each foreign CIS to be offered, marketed and distributed.

The operator is also required to appoint one or more local distributors for the offering, marketing or distributing a foreign fund offered in the country.

Source: ManilaTimes