MORNBFI Vol. 1 - Planters Development Bank

§ 4409Q.1708.12.31Trust entities currently holding oradministering trust funds of an affiliatepre-need company may continue to act astrustee of such funds after the transitionperiod provided under Item “g” only uponprior approval of the Monetary Board on thebasis of a clear showing that no potentialconflict of interest will arise. An absence ofany exception or finding on conflicts ofinterest during an examination of the trustentity shall be deemed as prima facieevidence that no potential conflict of interestwill arise.c. Investment of the trust fund. Unlessotherwise allowed under existing laws orregulations issued by the agency havingjurisdiction and supervision over pre-needcompanies, or with prior written approvalby said agency, loans and investments ofthe trust funds shall be limited to:(1) Evidences of indebtedness of theRepublic of the Philippines and of the BSP,and any other evidences of indebtedness orobligations wherein the servicing andrepayment of which are fully guaranteed bythe Republic of the Philippines or loansagainst such government securities;(2) Commercial papers duly registeredwith the SEC with a credit rating of one (1)for short term and “AAA” for long-term ortheir equivalent;(3) Loans fully guaranteed by theRepublic of the Philippines, as to thepayment of principal and interest;(4) Loans fully secured by a hold-outon, assignment or pledge of depositsmaintained with banks, and/or of depositsubstitutes or of mortgage and chattelmortgage bonds issued by the trustee/fiduciary or by banks;(5) Loans fully secured by real estate inaccordance with Section 37 and subject tothe requirements of Sections 39 and 40 ofR.A. No. 8791 and their implementingregulations; and(6) Loans fully secured byunconditional payment guarantees (such asstandby letters of credit and letter ofindemnity) issued by banks/multilateral FIs.d. Transactions with DOSRI. Thetrustee shall not, for the account of thetrustor or the beneficiary of the trust,purchase or acquire property from, or sell,transfer, assign or lend money or propertyto, or purchase debt instruments of, any ofthe departments, directors, officers,stockholders, employees, subsidiaries andaffiliates of the trustee and/or the trustor,and relatives within the first degree ofconsanguinity or affinity, or the relatedinterests, of such directors, officers andstockholders, without prejudice to any rulethat may be issued by the agency havingjurisdiction and supervision over suchpre-need company allowing suchtransaction with the prior written approvalof such agency. Such written approvalshall clearly specify the amount of the loanand/or investment including the name ofthe concerned director, officer, stockholderand their related interests.e. Applicability of the Rules andRegulations on Trust, Other FiduciaryBusiness and Investment ManagementActivities (Trust Rules). The provisions ofthe Trust Rules consistent with theprovisions of this Subsection shallsupplementarily apply to trust funds ofpre-need companies.f. Penalties and sanctions. Anyviolation of the provisions of this Subsectionshall be a ground for prohibiting theconcerned entity from accepting, managingand administering trust funds of pre-needcompanies without prejudice to theimposition of the applicable sanctionsprescribed or allowed under the Trust Rules.g. Transitory provisions. Institutionsperforming trust and other fiduciarybusiness which are presently administeringManual of Regulations for Non-Bank Financial InstitutionsQ RegulationsPart IV - Page 21