Regulations on Unit Investment Trust Fund (UITF) Investments
- Subsection X410.9/4410Q.9 defines allowable UITF investments and valuation rules.
- UITF investments must be limited to bank deposits and specified financial instruments.
- Permits loans from repo agreements transacted on SEC-recognized exchanges.
- Repo contracts must be lawfully pre-terminable by the trust entity administering the UITF with due notice to counterparties and market operators.
- BSP may authorize other tradable investment categories.
- Peso UITFs investing in tradable foreign currency-denominated instruments must comply with specific subsections concerning foreign exchange rules.
Definition of Tradable Financial Instruments
- A financial instrument is considered tradable if two-way price quotes are:
- Readily and regularly available from recognized exchanges, dealers, brokers, industry groups, pricing services, or regulatory agencies.
- Prices reflect actual, regularly occurring market transactions conducted at arm's length.
Purpose and Application
- The memorandum clarifies the implementation of BSP Circular Nos. 675 and 676.
- Guidance is for information and compliance by relevant financial institutions and entities.
Administrative Note
- Issued and signed by Ma. Dolores B. Yuvienco, Sector-in-Charge, BSP.
- Dated October 04, 2010, and published in NAR Vol. 21 No. 4, October-December 2010.