Regulatory Alerts2019-05-30
SEC Memorandum Circular No. 11 s.2019 – Amendment to ICA Rule 7.9
The Securities and Exchange Commission of the Philippines amended Rule 7.9 of the Implementing Rules and Regulations of the Investment Company Act to regulate investments by feeder, fund-of-funds, or co-managed funds into target funds administered by the same manager or related parties. The amendment mandates that no cross-holding of securities occur between the investing and target funds, requires the waiver of all initial charges on the target fund, and stipulates that management fees must be charged only once at either the feeder or target fund level. This circular took effect upon its publication in two newspapers of general circulation, specifically the Philippine Star and Manila Times on June 4, 2019.
Securities and Exchange Commission P H I L I P P I N E S
SEC Memorandum Circular 11, Series of 2019
TO : INVESTMENT COMPANY ADVISERS/FUND MANAGERS INVESTMENT COMPANIES
SUBJECT : AMENDMENT TO ICA RULE 7.9
The Commission, in its meeting on 28 May 2019, resolved to amend Rule 7.9 of the Implementing Rules and Regulations of the Investment Company Act, to read as follows:
"7.9. The Fund Manager can invest the funds of the feeder fund, fund-of-funds or co-managed funds to a target fund that is administered by the Fund Manager or its related party/company provided that:
a. There shall be no cross-holding between the feeder fund or fund-of-funds and the target funds where cross-holding refers to the holding of securities in another by two (2) or more funds; b. All initial charges on the target fund are waived; and c. The management fee shall be charged only once, either at the level of the feeder fund, fund-of-funds, co-managed funds or at the level of the target fund."
This Memorandum Circular shall take effect upon its publication in two (2) newspapers of general circulation.
Pasay City, May 29, 2019.
For the Commission:
EMILIO B. AQUINO Chairperson
Published: Philippine Star, June 4, 2019 Manila Times, June 4, 2019