BSP tightens license rules for sale of pooled trust investments
Bangko Sentral ng Pilipinas (File photo / Philippine Daily Inquirer)
Agents of financial institutions who sell participation in pooled trust funds must now pass a rigorous licensing program to help ensure that clients are fully apprised of the risks involved in these investments.
In a press statement, the Bangko Sentral ng Pilipinas (BSP) said its Monetary Board recently approved the amendment of existing regulations to strengthen the qualification requirements of Unit Investment Trust Fund (UITF) marketing personnel.
“The new rule requires all personnel involved in the sales and marketing of UITF to be certified through a certification program administered by a reputable financial services industry association/organization acceptable to the BSP,” the regulator said.
UITFs are investment products where clients’ pool funds into a single investment vehicle that is then managed by a financial institution like a bank or insurance company. It is similar to a mutual fund which is run by a non-bank firm.
According to the central bank, the UITF certification program is a three-pronged process composed of a qualifying examination, a requirement for continuing education, and a requirement for registration to monitor and manage the certified UITF marketing personnel.
Only agents who pass the exam shall be conferred the title of “Certified UITF Marketing Personnel”, the BSP said.
All accredited and licensed agents shall also be required to undergo trainings, seminars, and conferences annually to maintain an active status.
“The UITF Certification Program is expected to further advance the quality of marketing personnel and their sales and marketing practices,” the central bank said.
“It will likewise ensure that the marketing personnel can provide sufficient information on UITF to clients, as well as promote delivery of safe and effective products and services,” the regulator added
To ensure orderly transition of existing UITF marketing personnel, the new rule includes a transitory provision that allows existing agents to be certified under the program until 2021.
Accordingly, UITF marketing personnel authorized to sell these investments under the existing requirements, who shall undergo and fail to pass the certification program during the transitory period, will forfeit their existing qualification and will not be allowed to sell UITFs until such time that they obtain the required certification, the central bank said. /kga
