1121 PERSONAL EQUITY AND RETIREMENT ACCOUNT (PERA) MARKET PARTICIPANTS AND PERA INVESTMENT PRODUCTS
a. PERA investment products. The following PERA investment products are considered to be Bangko Sentral-eligible PERA investment products: Provided, That with respect to Items “(1)” and “(2)” below, they are issued by Bangko Sentral-supervised entities with CAMELS rating of not lower that “3” or its equivalent, to wit:
(1) Unit investment trust fund (UITF);
(2) Debt-instruments such as, but not limited to, long term negotiable certificate of deposits and unsecured subordinated debt;
(3) Deposits; and
(4) Government-issued securities.
b. PERA market participants
|PERA Market Participants||Eligible Entities|
|Administrator||Banks, trust entities and other entities as may be determined by the Bangko Sentral as eligible to act as PERA Administrator|
|Investment Manager||Trust entities and other entities as may be determined by the Bangko Sentral as having the qualifications to be accredited as PERA Investment Manager|
|Securities Custodian||Banks and trust entities|
|Investment Product Provider||Any Bangko Sentral-supervised entity that wishes to offer PERA Investment Product to Contributors|
a. As an Administrator. The Bangko Sentral shall issue a Qualification Certificate as Administrator to an entity upon compliance with the following requirements:
(1) The applicant maintains a net worth of at least Php100 million at all times.
Net worth shall refer to the combined capital accounts of the Administrator which shall mean the total of the unimpaired paid- in capital, surplus and undivided profits, less:
(a) The one percent (1%) of the book value of the total volume of PERA assets administered and other capital adjustments as may be required by the Bangko Sentral;
(b) Total outstanding unsecured credit accommodations, both direct and indirect, extended by the Administrator to DOSRI; and
(c) Appraisal surplus or appreciation credit as a result of appreciation or an increase in the book value of the assets of the Administrator.
DOSRI cited in Item “1(b)” above shall refer to that provided in Sec. 341 (Definitions): Provided, That for purposes of this provision, references to a bank as an entity shall be understood to include references to any other type of entity acting as Administrator.
(2) It has adopted a Manual of Corporate Governance approved by the Bangko Sentral, and is in full compliance therewith.
(3) It has a clear and sufficient organization plan or structure of its personnel who will perform the PERA administration functions, stating the definition of the duties and responsibilities as well as the line and staff functional relationships.
(4) It possesses adequate systems and technological capabilities, and the necessary technical expertise and personnel to administer all types of PERA investment products, ensure the proper recording and tracking of a contributor’s PERA, and perform the other required functions of an Administrator.
(5) It has sufficient personnel who have undergone the requisite training prescribed by the Bangko Sentral to educate the contributor on:
(a) The nature of a PERA;
(b) Privileges, conditions and requirements of a PERA;
(c) The risks and benefits of each type of PERA investment products; and
(d) Respective roles of the Administrator, Investment Manager and Custodian.
(6) It has adopted the following forms that the Administrator shall use in dealing with the Contributor and his PERA:
(a) Pre-Acceptance Disclosure Policy described in PERA Rule 6.A.2.a;
(b) Client Suitability Assessment Questionnaire referred to in PERA Rule 6.A.2.b(i);
(c) Risk Disclosure Statement, which shall include the standard minimum information referred to in PERA Rule 6.A.2.d; and
(d) Contract between the Contributor and the Administrator referred to in PERA Rule 6.A.2.c.
(7) It has a board-approved policy on fees and charges to be imposed for its services as Administrator which shall be subject to Bangko Sentral approval.
Failure to satisfy any of the above requirements shall be a ground for the denial of the application, without prejudice to the re-filing of an application.
An Administrator who has been issued with a “Qualification Certificate” shall then file an application for accreditation with the PERA Processing Office of the BIR to complete its application process to become a PERA Administrator.
b. As an Investment Manager. The Bangko Sentral shall accredit an entity as an Investment Manager upon submission of a written application certified by the Chief Executive Officer (CEO) together with the following documentary requirements:
(1) Written supervision and control procedures for the conduct of the investment management functions;
(2) Proof of at least five (5) years of experience in professional investment management;
(3) Certified true copy of educational, professional/technical or other academic qualifications of its principal officers;
(4) Copy of its form contract to be utilized. The agreement between the contributor and the Investment Manager shall contain the following minimum contents:
(a) Overall investment philosophy, standards and practices of the Investment Manager; and
(b) Validation of contributor’s Client Suitability Assessment and Investment Policy Statement made by contributor’s Administrator referred to in PERA Rule 6.A.2.b (i) and (ii); and
(5) A schedule of commission charges and/or other fees it will charge for its services.
c. As a custodian
Cash custodian. In addition to the standard pre-qualification requirements for the grant of banking authorities enumerated in Appendix 5, banks applying for authority to act as cash custodian for PERA shall also comply with the following conditions:
(1) The applicant bank must have complied with the minimum capital required under Sec. 121 (Minimum capitalization); and
(2) The Bank’s CAMELS composite rating in its latest examination is not lower than “3” with Management component score of not lower than “3”.
Securities custodian. Only banks and other entities with trust license which have complied with the requirements under Sec. 431 (Pre-qualification requirements for a securities custodian/registry) may be accredited as securities custodian.
a. Certified true copy of the resolution of the entity’s board of directors authorizing the application;
b. Certification signed by the CEO that the entity has complied with all the relevant qualification/accreditation requirements enumerated under this Section and an undertaking to comply with the aforementioned requirements while it acts as an Administrator, Investment Manager, Cash Custodian and/or Securities Custodian; and
c. Relevant PERA forms, Board-approved policy on fees and charges, and proof of compliance with this Section insofar as the application of the Administrator is concerned.
a. Valuation of securities and basis of computation of the basic security deposit requirement.
Prior to 31 March 2018:
(1) For purposes of determining compliance with the security for the faithful performance of administrators under the PERA Act, the amount of securities so earmarked shall be based on their book value, that is, cost as increased or decreased by the corresponding discount or premium amortization.
(2) The base amount for the basic security deposit shall be the average of the month-end balances of administered assets for the immediately preceding calendar quarter.
Effective 31 March 2018, the provisions under Item “a(1)” above shall no longer apply. The following provisions on the valuation of government securities shall be adopted starting 31 March 2018:
Government securities deposited with the Bangko Sentral shall be measured at fair value according to the marking-to-market guidelines for government securities under Appendix 28, subject to applicable haircuts.
The haircuts that shall be applied to the government securities shall be as follows:
|Residual Maturity||Minimum Haircut (in Percent) for Basic Security Deposit|
|3 years and below||0.0|
|>3 years up to 5 years||2.0|
b. Compliance period; Sanctions. The administrator shall have one (1) week from the end of every calendar quarter within which to replenish any deficiency in the security requirements as abovementioned, by depositing with the Bangko Sentral, government securities pursuant to existing regulations to comply with the basic security deposit requirement.
Effective 31 March 2018, the administrator shall also comply with the basic security deposit requirement in the following manner:
(1) Quarterly compliance. The administrator shall comply with the basic security deposit requirement on a quarterly basis. In determining quarterly compliance, the fair value of government securities used as compliance with the basic security deposit requirement shall be reckoned as of the end of the calendar quarter and the base amount for the basic security deposit requirement provided under Item “a” of this Section (Security for the faithful performance of administrators) shall be applied.
Haircuts for government securities as provided under Item “a” of this Section (Security for the faithful performance of administrators) shall be applied on the fair value of the government securities used as compliance with the basic security deposit.
(2) Compliance upon withdrawal, replacement or redemption. The administrator shall ensure that it will continue to comply with the basic security deposit requirement after every withdrawal, replacement or redemption of government securities within the quarter period. In determining compliance, the basic security deposit requirement shall be the amount computed as of the quarter-end preceding the date of withdrawal, replacement or redemption pursuant to Item “a” of this Section (Security for the faithful performance of administrators). The fair value of the remaining government securities, adjusted for the relevant haircuts, shall also be based on amounts reported as of the quarter-end preceding the date of withdrawal, replacement or redemption pursuant to Item “a” of this Section (Security for the faithful performance of administrators).
a. Willfully violated any provision of the PERA Act, the PERA Rules or any regulations and issuances by the Bangko Sentral made pursuant thereto, or any other law administered by the Bangko Sentral relevant to its function as a PERA Market Participant, or not providing prudential standards for asset management or has aided, abetted, counseled, commanded, induced or procured such violation;
b. Failed to supervise, with a view to preventing such violation, a person associated to the applicant or licensee by virtue of an arrangement or other types of arrangement and who commits such violation;
c. Willfully made or caused to be made a materially false or misleading statement in the application for qualification/accreditation or report filed with the Bangko Sentral, or has willfully omitted to state any material fact that is required to be stated therein or necessary to make the statement therein not misleading;
d. Failed to maintain the qualifications or requirements for accreditation prescribed under the PERA Rules, these guidelines or has failed to maintain compliance with any of them;
e. Failed to carry on and manage its PERA-related business and activities in a proper, diligent and efficient manner to the prejudice of the Contributor;
f. Been subject to regulatory sanctions for (a) violations, which the Bangko Sentral determines to affect its operation conditions and ability as a PERA Market Participant, such as but not limited to violations affecting required capitalization and/or solvency, or (b) any act or behavior prejudicial to the PERA Contributors;
g. Been enjoined or restrained by a competent body from engaging in securities, banking or insurance activities;
h. Failed to enforce or monitor PERA contribution limits entitled to tax incentives; or
i. Failed to manage or adequately address conflicts of interest in the performance of its functions, which may be identified by the Bangko Sentral as prejudicial to the interests of the PERA Contributor.
a. Act as administrator, custodian or investment manager without being properly qualified or without being granted prior accreditation by the Bangko Sentral;
b. Invest the contribution without written or electronically authenticated authority from the contributor, or invest the contribution in contravention of the instructions of the contributor;
c. Knowingly and willfully make any statement in any application, report, or document required to be filed under the PERA Act, which statement is false or misleading with respect to any material fact;
d. Misappropriate or convert, to the prejudice of the contributor, contributions to and investments or income from the PERA;
e. By gross negligence, cause any loss, conversion, or misappropriation of the contributions to, or investments from the PERA; or
f. Violate any provision of the PERA Act or rules and regulations issued pursuant to the PERA Act.
- Trust entity shall refer to a (a) bank or non-bank financial institution, through its specifically designated business unit to perform trust functions, or (b) trust corporation, authorized by the Bangko Sentral ng Pilipinas to engage in trust and other fiduciary business under Section 79 of R.A. No. 8791 (the General Banking Law of 2000) or to perform investment management services under Section 53 of R.A. No. 8791.