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Basic Standards In The Administration Of Trust, Other Fiduciary And Investment Management Accounts

08.12.2008

BSP Governor Amando M. Tetangco, Jr. announced that the Monetary Board approved amendments to BSP regulations on trust to incorporate basic standards in the administration of trust, other fiduciary and investment management accounts.

The amendments seek to reinforce BSP’s advocacy of investor protection and raise the performance bar for financial institutions engaged in trust and other fiduciary business, and investment management activities in line with international best practices.  Significant areas of trust operations are being improved to emphasize the conduct of client profiling and formulation of investment policy statement prior to opening of trust accounts, primarily to guide the investing public to make informed investment decisions suited to his/her investment objective, risk tolerance, investment preference and financial experience and sophistication.  The basic standards also emphasize the adoption of the three-fold administration processes – review, credit and investment – designed to ensure consistency in the performance of trust, other fiduciary and investment management activities and provide a uniform interpretation of the prudent man rule across the industry.  

“To a large extent, implementation of the basic standards will further promote the soundness of the trust industry to operate and act with fidelity, the cardinal principle common to all trust and fiduciary relationships, especially in the wake of growing investors’ risk-aversion as a result of the global economic slowdown, rising commodity prices and financial market turbulence”, Governor Tetangco emphasized.
 
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