MORNBFI Vol. 1 - Planters Development Bank

§§ 4409Q.17 - 4410Q.508.12.31and managing trust funds of pre-needcompanies are hereby given a period of one(1) year from 25 April 2006 to comply withthe requirements hereof.(Memorandum to All Banks and NBFIs dated 28 March 2006)Sec. 4410Q Unit Investment Trust Funds/Common Trust Funds 1 . The following rulesand regulations shall govern the creation,administration and investment/s of UnitInvestment Trust (UIT) Funds.The rules and regulations on CommonTrust Funds (CTFs) are in Appendix Q-32.§ 4410Q.1 Definitiona. Unit Investment Trust Funds. UnitInvestment Trust Funds are open-endedpooled trust funds denominated in pesos orany acceptable currency, which are operatedand administered by a trust entity and madeavailable by participation. The term UnitInvestment Trust Fund is synonymous toCTFs. As an open-ended fund, participationor redemption is allowed as often as statedin its plan rules.UIT Funds shall not include long termfunds designed for the primary purpose ofavailing the tax incentives/exemption underSection 24(B)(1) of R.A. No. 8424 (The TaxReform Act of 1997).b. Trust entity. Any bank, IH or a stockcorporation duly authorized by the MonetaryBoard to engage in trust, investmentmanagement and fiduciary business.c. Board of directors. For this purpose,the term shall include a trust entity’s dulyconstituted board of directors or itsfunctional oversight equivalent which shallinclude the country head in the case offoreign institutions.§ 4410Q.2 Establishment of a UnitInvestment Trust Fund. Any trust entityauthorized to perform trust functions mayestablish, administer and maintain one (1)or more UIT Funds subject to applicableprovisions under this Section.§ 4410Q.3 Administration of a UnitInvestment Trust Fund. The trustee shallhave exclusive management and controlof each UIT Fund under its administration,and the sole right at any time to sell,convert, reinvest, exchange, transfer orotherwise change or dispose of the assetscomprising the fund: Provided, That noparticipant in a UIT Fund shall have or bedeemed to have any ownership or interestin any particular account or investment inthe UIT Fund but shall have only itsproportionate beneficial interest in the fundas a whole.§ 4410Q.4 Relationship of trustee withUnit Investment Trust Fund. A trusteeadministering a UIT Fund shall not haveany other relationship with such fund otherthan its capacity as trustee of the UIT Fund:Provided, however, That a trustee whichsimultaneously administers other trust,fiduciary or investment management fundsmay invest such funds in the trustee’s UITFund, if allowed under a policy approvedby the board of directors.§ 4410Q.5 Operating and accountingmethodology. A UIT Fund shall beoperated and accounted for in accordancewith the following:a. The total assets and accountabilitiesof each fund shall be accounted for as asingle account referred to as pooled-fundaccounting method.b. Contributions to each fund by clientsshall always be through participation in unitsof the fund and each unit shall have uniformrights or privileges, as any other unit.c. All such participations shall bepooled and invested as one (1) account(referred to as collective investments).d. The beneficial interest of eachparticipation unit shall be determined undera unitized net asset value per unit (NAVPu)valuation methodology defined in thewritten plan of the UIT Fund, and no1The regulations on common trust funds (CTFs) were relocated to Appendix Q-32. UIT Funds regulations took effect on 01October 2004 (effectivity of Circular 447 dated 03 September 2004).Q RegulationsManual of Regulations for Non-Bank Financial InstitutionsPart IV - Page 22