Tighter requirements set in marketing UITF

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) has tightened the requirements for the certification of unit investment trust fund (UITF) marketing personnel to ensure the provision of safe and effective products to the public.

The Monetary Board of the BSP recently approved the amendment of existing regulations to strengthen the qualification requirements of all personnel involved in the sale and marketing of UITF products.

Under the new rule, all UITF marketing personnel are now required to be accredited through a certification program administered by a reputable financial services industry association or organization acceptable to the BSP.

“The UITF Certification Program is expected to further advance the quality of UITF marketing personnel and their sales and marketing practices,” the central bank said in a statement.

“It will likewise ensure that the marketing personnel can provide sufficient information on UITF to clients, as well as promote delivery of safe and effective products and services,” it said.

According to the central bank, the UITF Certification Program is a three-pronged process composed of a qualifying examination, a requirement for continuing education, and a requirement for registration to monitor and manage certified UITF marketing personnel.

This means only personnel who pass the exam will be given certification. All certified personnel will also be required to undergo trainings, seminars or conferences annually to maintain active status.

To ensure the proper transition of existing UITF marketing personnel, the new rule will allow them to undergo the Certification Program until 2021.

Existing marketing personnel who undergo and fail the certification program  will be required to forfeit their existing qualification, and will not be allowed to sell UITF until such time that they obtain the required certification, the BSP said.

UITFs are open-ended pooled trust funds denominated in pesos or any acceptable currency that are operated and administrated by a trust entity and made available by participation.

Latest data from the BSP showed UITFs dropped by 8.2 percent to P768 billion in 2017 from P831.3 billion in 2016 due to the decline in the market value of the total assets of UITFs.

The drop was not due to investors’ loss of interest on the product.

There are various types of UITFs that are now available in the market which include, among others, feeder funds, multi-class UITFs and UITFs with unit-playing feature that allows for a non-guaranteed stream of income to its participants.