MORNBFI Vol. 1 - Planters Development Bank

§ 4410Q.708.12.31units subject to the minimum conditionsenumerated hereunder.(1) Marketing materials. All printedmarketing materials related to the sale of aUIT Fund shall clearly state:(a) The designated name andclassification of the fund and the fund’strustee.(b) Minimum information regarding:(i) The general investment policy andapplicable risk profile. There shall be aclear description/explanation of thegeneral risks attendant with investing in aUIT Fund, including risk specific to a typeof fund. Technical terms should likewisebe defined in laymen’s terms 1 .(ii) Particulars or administrative andmarketing details like pricing and cut-offtime.(iii) All charges made/to be madeagainst the fund, including trust fees, otherrelated charges.(iv) The availability of the Plan rulesgoverning the fund, upon the client’srequest.(v) Client and Product SuitabilityStandards. Prior to admission, the trusteeshall perform a client profiling process forall UIT Fund participants under the generalprinciples on client suitability assessmentto guide the client in choosing investmentoutlets that are best suited to his objectives,risk tolerance, preferences andexperience. The profiling process shall, atthe minimum, require the trustee to obtainclient information through the ClientSuitability Assessment (CSA) form, classifythe client according to his financialsophistication and communicate the CSAresults to the subject client. The generalprinciples on CSA shall also require thetrustee to adopt a notice mechanismwhereby clients are advised and/orreminded of the explicit requirement tonotify the trustee or its UIT Fundmarketing personnel of any change intheir characteristics, preferences orcircumstances to enable the trustee to updateclient’s profile at least every three (3) years.(c) The participation is not a “depositaccount” but a trust product; and that anyloss/income is for the account of theparticipant; that the trustee is not liable forlosses unless upon willful default, bad faithor gross negligence.(d) A balanced assessment of thepossible gains and losses of the UIT Fundand that the participation does not carry anyguaranteed rate of return, and is not insuredby the PDIC.(e) An advisory that the investor mustread the complete details of the fund in thePlan Rules, make his/her own riskassessment, and when necessary, he/shemust seek independent/professionalopinion, before making an investment.(2) Evidence of participation. EveryUIT Fund participant shall be given -(a) A participating trust agreement.Such agreement shall clearly indicate that(1) the UIT Fund is a trust product and not adeposit account or an obligation of, orguaranteed, or insured by the trust entityor its affiliates or subsidiaries; (2) the UITFund is not insured or governed by thePDIC; (3) due to the nature of theinvestment, yields and potential yieldscannot be guaranteed; (4) any loss/incomearising from market fluctuations and pricevolatility of the securities held by the UITFund, even if invested in governmentsecurities, is for the account of the client/participant; (5) as such, the units ofparticipation of the investor in the UITFund, when redeemed, may be worthmore or be worth less than his/her initialinvestment/contributions; (6) historicalperformance, when presented, is purely forreference purposes and is not a guaranteeof similar future result; and (7) the trusteeis not liable for losses unless upon willfuldefault, bad faith or gross negligence.1Example: “Fixed income securities” does not really mean a guarantee of fixed earnings on the investor’s participation;“Risk-free” government securities which may be sovereign “risk-free” but not interest rate “risk-free”.Manual of Regulations for Non-Bank Financial InstitutionsQ RegulationsPart IV - Page 25