BSP requires banks to make daily reports on UITF deals

MANILA, Philippines - The Bangko Sentral ng Pilipinas has required banks to disclose the daily performance of their unit investment trust fund (UITF) products to better inform the clients of their funds’ activities.

“The recent amendments to UITF regulations, particularly on the inclusion of the Key Information and Investment Disclosure Statement (KIIDS) as part of disclosure documents and the requirement to make the NAVPU (net asset value per unit) available daily and historically, are to improve consumer protection and align these with global best practices,” BSP Governor Amando M. Tetangco Jr. said in a text message yesterday.

The BSP issued a circular earlier this week, which revises the disclosure requirements for banks with regard to their UITF products.

“The circular specifies the content and format of the KIIDS, a one-sheet document that is intended to help UITF investors better understand and compare across UITF offerings,” Tetangco said.

At the same time, the central bank issued Circular 853, which allows the creation and offering of multi-class UITF products.

“Before this, UITF regulations only allow for a single fee structure, target participants, minimum participation and holding period for each UITF. Under this new Circular, trust specialists could create mutli-class UITFs, which would have several classes of units which may be differentiated based on level of trust fees, holding period, etc.,” Tetangco said.

The creation of the multi-class UITF is expected to promote operational efficiency and improve economies of scale for collective investments,” he said.

Both circulars take effect 15 days after its publication on a newspaper of general circulation.

Trust licensees are allowed to establish and manage UTIFs, subject to the rules approved by the BSP.

Regulations covering the creation of UITFs were released in 2004 following a mandated shift from common trust funds, which was phased out in 2006.