SEC issues ‘sustainable, responsible’ fund standards

Emilio Aquino —CONTRIBUTED PHOTO

MANILA  -The Securities and Exchange Commission (SEC) has established guidelines allowing local companies and those from other Association of Southeast Asian Nations (Asean) countries to offer sustainable funds after approving the adoption of the Asean Sustainable and Responsible Fund (SRF) Standards.

In a statement on Tuesday, the regulator said it had issued SEC Memorandum Circular No. 4, Series of 2023, to make the adoption of the standards effective.

The guidelines cover minimum disclosure and reporting requirements for sustainable and responsible fund that seek to “mitigate the risk of greenwashing, among others.”

The new rules are parallel with the Framework for Cross-Border Offering of Asean Collective Investment Schemes. These are applicable to investment companies, including sub-funds of umbrella funds, and fund managers applying to qualify under the Asean SRFs, among others.

The SEC, led by chair Emilio Aquino, said that an investment company could qualify upon presenting proof that it is a registered entity with authority to issue shares in accordance with the Securities Regulation Code. It must also comply with the Rules on Sustainable and Responsible Investment Funds.

An application form signed by at least majority of an investment company’s board of directors is needed by existing entities wishing to apply as an Asean “sustainable and responsible fund.”

Foreign SRF, to be recognized in the Philippines, must comply with regulatory requirements, including disclosure on sustainable investment strategy.

“If the Commission is satisfied that the foreign SRF has complied with the requirements, a letter recognizing the foreign SRF shall be issued,” the regulator said.

The SEC said it could suspend or revoke the qualification of an investment company as an Asean SRF if they are no longer adhering to policies in place. INQ