SEC issues guidelines for PERA participants

MANILA, Philippines — The Securities and Exchange Commission (SEC) has issued the guidelines for the accreditation of market participants offering Personal Equity and Retirement Account (PERA) products.

The commission said the guidelines issued under Memorandum Circular 14 would apply to entities regulated by the SEC seeking to register as a PERA market participant, such as a PERA administrator or investment manager.

The SEC said securities brokers, investment houses and investment company advisers or fund managers may register as PERA administrators, while investment company advisers or fund managers may register as investment managers.

Likewise, other qualified entities or individuals as may be determined by the SEC may also apply as PERA administrator or investment manager.

To qualify as a PERA administrator, the SEC said an applicant must maintain a net worth of at least P100 million at all times as well as adopt and fully comply with a manual of corporate governance.

An applicant must also provide a clear and sufficient organizational plan or structure of its personnel who will perform PERA administration functions.

Further, it must possess adequate systems and technological capabilities as well as the necessary technical expertise and personnel to administer all types of PERA investment products.

The SEC said an applicant must also submit proof that it has sufficient personnel who have undergone the requisite training prescribed or approved by the commission to educate PERA contributors on the nature of a PERA and the requirements, risks and benefits of the investment product, among others.

Registered PERA administrators are required by the SEC guidelines to hold government securities equivalent to one percent of the book value of the total volume of PERA assets administered or such other amount as the SEC may impose, earmarked in favor of the commission.

“This will serve as security for the faithful performance of its duties. The amount shall be in addition to and shall be treated separately from the capital, surplus and undivided profits of the administrator,” the SEC said.

However, the commission said it has decided to temporarily reduce the amount of the security deposit to zero percent of the book value of the total volume of PERA assets administered to encourage market participants to apply as a PERA administrator.

Meanwhile, commission said that regulated entities applying to be PERA investment managers must have written supervision and control procedures for the conduct of the investment management functions, with proof of at least five years’ experience in professional investment management.

The applicants must also provide certified true copies of educational, professional/technical or other academic qualifications of its principal officers; certification requirement for compliance Officer; copy of the form contract or agreement between the contributor and investment manager as well as the schedule of commission charges and/or fees it will charge for its services.