On Mar. 25, PHI CB proposed rules on the periodic review of accounts.
PHI CB proposed amendments to the rules on periodic review of trust, other fiduciary, and investment management accounts per the manual of regulations for banks (MORB) and the manual of regulations for non-bank financial institutions (MORNBFI).
Follows PHI CB Jun. 2021 proposals re the periodic review of accounts, see #108829.
Review Processes
The board of directors shall adopt policies and procedures on the conduct of periodic reviews of trust, other fiduciary, and investment management accounts.
The accounts review shall be conducted by officers or a management committee who are not directly involved in the management of investments of the accounts.
Provisions on what the accounts review shall consist of such as administrative review.
Trust entities shall be given 6 months from the effectivity of the rules to make appropriate changes in their policies, processes, and procedures in order to comply.
Effectiveness
Stakeholders can submit comments until Apr. 15, 2024.
Nov. 2024 Trust Account Review
On Nov. 8, 2024, PHI CB issued circular setting supervisory expectations for periodic review of trust and fiduciary accounts, amending Manual of regulations for banks and Manual of regulations for non-bank financial institutions via resolution no. 1237.
Trust entities must conduct administrative and investment reviews based on account types; account-level reviews for discretionary accounts and complex portfolios.
In addition, collective reviews allowed for homogeneous accounts and direct Unit investment trust fund (UITF) participants may be excluded from indicated reviews.
Administrative reviews required every three years, more frequent for public interest accounts; deciding factors include size of the assets and beneficiary demographics.
Investment reviews at least annually, frequency per account nature and requirements.
Administrative reviews must examine accuracy and completeness of governing documents as well as the timeliness of the trust entity's performance of its duties.
Investment reviews must assess portfolio suitability vs risk profile, asset allocation appropriateness, performance vs benchmark, related party transaction compliance.
Trust entities must complete gap analysis within 6 months, update policies and procedures within one year, and document the relevant review results for PHI CB.
Circular takes effect Nov. 23, 2024, being 15 days after Nov. 8, 2024.
Document dated Nov. 8, 2024, received from PHI CB Nov. 11, summarized on Nov. 13.
