MANILA, Philippines – The First Metro Investment Corp. (FMIC) is protesting a plan to disallow non-trust entities such as investment houses, investment company advisors, insurance companies and stock brokerages in participating as administrator and investment manager in the implementation of the Personal Equity and Retirement Account (PERA) Act of 2008.
In a letter to the Philippine Stock Exchange (PSE), FMIC vice chairman of the First Metro Asset Management Inc. Roberto Juanchito T. Dispo likewise objected to implied insinuations that non-trust entities were incapable of handling, managing and avoiding conflicts in relation to assuming the role of administrator and investment manager of PERA funds.
“This is an obvious indictment of our capability and our concern for the safety and interest of our clients. We strongly object to this implied indictment,” Dispo added.
Dispo said that the administrator and investment management of PERA are soles that are similar in nature and function as what they do for their non-PERA clients.
“And records will show that there has not been any reported case of investment losses or anomalies specifically arising from the assumption of both of these roles by the same entity,” he added.
He said that there are many investment company advisers who manage the investment activities of some of the largest and reputable mutual funds, and they certainly have the operational and technical capabilities to support these investment activities.
The PERA Law has not been implemented as the implementing rules and regulations (IRR) are still being formulated, which is the job of the Technical Working Group.
The PERA will establish a legal and regulatory framework for voluntary personal retirement plans, comprised of voluntary personal savings and investments, and promote capital market development and savings mobilization, contribute to long-term fiscal sustainability through long-term financing.
The controversial provision being noted by Dispo is under rule 3.A, regarding the entities qualified to be PERA administrator.
The argument is that non-trust entities can be administrators but that the invesment managers and product provider must obtain a trust license from the Bangko Sentral ng Pilipinas (BSP).
Another provision in the law states that the PERA investment product must be invested solely in the Philippines.
The PERA rule does not expressly state that the PERA investment product must be a domestically registered or licensed product and that the issuer thereof must be a domestic issuer.
According to the members of the working group, it may end up having the concerned regulatory authority to approve or determine specific investment products.–Ted P. Torres, Philippine Star