The Securities and Exchange Commission (SEC) publishes a list of stocks, bonds, funds and other securities in which Personal Equity and Retirement Account (PERA) funds may be invested.
On May 17, the Commission published for public comment the proposed rules on qualifying and/or qualifying personal capital account and retirement investment products, in accordance with the PERA Act of 2008, and its implementing rules and regulations. .
Under the proposed rules, securities registered in accordance with the requirements of the Securities Regulation Code and the Investment Companies Act are deemed to be eligible PERA investment products.
These include newly created mutual funds, including any sub-funds of an umbrella fund, and exchange-traded funds whose fund managers have a track record of at least five years and whose names contain the words “Personal Equity and Retirement Account” or “PERA”. ”
It also includes real estate investment fund units; corporate bonds with an investment grade rating issued by an accredited credit rating agency; and equity securities that are part of the Philippine Stock Exchange Index (PSEi).
Government securities, securities issued by the Bangko Sentral ng Pilipinas (BSP) and corporate bonds issued by banks in accordance with the requirements of the BSP will also be considered as eligible PERA investment products.
The SEC may qualify other securities to qualify as PERA investment products if the product is non-speculative, readily tradeable, and has a history of regularly paying income to investors.
A security loses its eligibility as a PERA investment product when the SEC declares it ineligible.
A registered equity security may also lose its eligibility if its registration statement is suspended or revoked, or in the case of a PSEi member security, if it is withdrawn from the PSEi.
In the meantime, corporate bonds issued by banks may be considered ineligible if they are declared in default by a competent authority or person in accordance with applicable laws, rules and contracts, and if their credit rating is downgraded to a non-investable note.
A security that has been deemed eligible by the SEC may also lose its eligibility after it is found to have lost one or all of the characteristics required to be non-speculative, readily tradeable, and provide a regular income payment.
An investment in a security subsequently declared ineligible as a PERA investment product may continue to be permitted to be part of the PERA portfolio, provided that any subsequent investment by a contributor in said security after being declared ineligible will not be eligible. to be part of the PERA portfolio.
The rules will require issuers of securities that have been qualified by the SEC to be eligible PERA investment products to comply with reporting requirements set by the Commission.
Failure to comply with the guidelines and other relevant laws, rules and regulations will result in administrative penalties and other civil and criminal liabilities under applicable laws.
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