Question & AnswerQ&A (BSP MEMORANDUM NO. M-2010-033)
The purpose of BSP Circular No. 676 is to liberalize the foreign exchange regulatory framework, allowing Philippine resident investors to invest funds sourced from the banking system in amounts not exceeding USD 30 million per year, increased from USD 12 million, and permitting outward investments by managed or trusteed accounts other than pooled funds.
The funds to be invested shall be sourced from the banking system.
The maximum amount is USD 30 million per year, increased from the previous limit of USD 12 million.
Yes, outward investments by managed or trusteed accounts other than pooled funds are allowed.
UIT fund investments shall be limited to bank deposits and specific financial instruments including loans arising from repo agreements transacted through an exchange recognized by the SEC, and other tradable investments as allowed by the BSP.
The repo contracts may be lawfully pre-terminated by the trust entity administering the UITF and acting as lender, with due notice to its counterparty and the market operator.
A financial instrument is regarded as tradable if quoted two-way prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm's length basis.
Yes, such investments are allowed but are subject to items aea and afa of Subsection X 409.6/4409Q.6 of the Manual of Regulations for Banks/Non-Bank Financial Institutions.
It amends provisions of Circular Nos. 590 and 645 dated 27 December 2007 and 13 February 2009, respectively, and Section 44 of Circular No. 1389.