The Bangko Sentral ng Pilipinas (BSP) will allow banks to invest trust funds in derivative instruments, as part of efforts to deepen the local debt market.

The central bank issued Circular 999, which allows players to place unit investment trust funds (UITFs) in hedge and feeder funds.

“This is part of financial market liberalization as part of reform agenda. Allows more flexibility to funds in their use of derivatives to create better investment value propositions,” BSP Governor Nestor A. Espenilla, Jr. said in a text message. — Melissa Luz T. Lopez

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