SEC issues rules for investment adviser pass

THE Securities and Exchange Commission (SEC) has issued the guidelines that will allow the free movement of investment advisers within members of the Association of Southeast Asian Nations (ASEAN) that are signatories to a framework that aims to enhance the connectivity of capital market professionals in the region.
As signatory to the memorandum of understanding on the ASEAN Capital Markets Forum (ACMF) Pass, licensed professionals in their home country can perform investment advice activities and issue research report on the region’s financial products in a host country.
The signatories to the framework are the Philippines, Malaysia, Singapore, and Thailand.
The guidelines are applicable to professionals in the Philippines who intend to obtain an ACMF Pass in another signatory country, and those in other signatory countries who want to obtain that same pass.
The qualified capital market professionals in the Philippines include sales personnel of a broker dealer and/or investment house, who is a natural person hired to buy and sell securities on a salary or commission basis.
Also included are certified investment solicitors who are licensed by the SEC and appointed by a fund manager or mutual fund distributor to solicit, sell or offer to sell the shares or units of an investment company to the public.
Key officers of fund managers and other professionals that the SEC may, in the future, determine as also eligible to apply for the ACMF Pass.
The ASEAN capital market products that they may give advice on are limited to shares, bonds, and units of collective investments scheme, including units of real estate investment trust, and units of infrastructure fund.
The scope of their activities in a host jurisdiction is limited to issuing or promulgating research analysis or research reports concerning the capital market products that are solely incidental to the giving of general investment advise.
They are also permitted to give general investment advice to both retail and non-retail investors concerning the allowed capital market products.
The SEC guidelines identified two activities that are prohibited under the pass, namely: giving advice to investors by considering their investment objective, financial situation and particular needs; and soliciting for sales of the capital market products.
Under the guidelines the mode of performance of the investment service may either be through physical presence of electronic means.
The ACMF Pass is valid for two years from the date of grant unless earlier revoked or canceled by the SEC. Renewal guidelines for professionals in the Philippines issued by other signatory countries will be provided by the relevant host jurisdictions.
SEC Chairman Emilio B. Aquino signed the guidelines on Feb. 26, 2019. The commission issued the rules as signatory to the ASEAN Capital Market Professional Mobility Framework. — Victor V. Saulon