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MB Approves PERA Guidelines for Banks and Trust Entities

11.21.2014

The Monetary Board (MB) approved the guidelines for the accreditation of Personal Equity Retirement Act (PERA) market participants.

Under the guidelines, market participants are defined as administrators, investment managers and custodians of either the cash balances of PERA clients or their investments in PERA-eligible securities. The guidelines also provide specific details for handling PERA-related processes such as account opening, administration, withdrawal and termination.

“The MB’s approval of the guidelines brings us closer to providing each Filipino with an effective tool for securing his future,” said Bangko Sentral ng Pilipinas (BSP) Governor and MB Chairman Amando M. Tetangco, Jr.

The Governor further noted that, “The BSP has always reminded the public about preparing for retirement and the PERA law is an excellent vehicle for achieving one’s personal goals.”

The guidelines provide rigorous standards for banks and trust entities which may have an interest to function as a PERA market participant.  This ensures that only those which meet the high standards will deal with the public.

Apart from setting standards for institutions, the same guidelines identify safety nets for PERA contributors. This includes putting in place processes and procedures for assessing the level and type of risks that PERA investors may take, ensuring that financial risks are appropriately disclosed to investors, as well as having the necessary systems in place for reportorial purposes.

The MB also separately approved the execution of a memorandum of agreement with the Bureau of the Treasury for handling basic securities deposits for the faithful performance of the duties of PERA administrators.

To further initiate the application of PERA accounts, the MB likewise approved an initial list of PERA-eligible investment outlets. This includes bank deposits, long-term negotiable certificates of time deposits, unsecured subordinated debts, unit investment trust funds, government securities and related debt instruments.

To ensure the smooth implementation of the PERA law, an inter-agency board is also being created. This will include senior officers from the BSP, Bureau of Internal Revenue, Insurance Commission and Securities and Exchange Commission.

With the approval of the guidelines, the BSP notes that preparations are on schedule for a January 2015 launch date.

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