MORNBFI Vol. 1 - Planters Development Bank

§§ 4410Q.8 - 4410Q.1010.12.31That, in the case of an exchange tradedequity security which is included in an indexand tracked by the UIT Fund, the exposureof the UIT Fund to a single entity shall bethe actual benchmark weighting of the issueror fifteen percent (15%), whichever ishigher.This limitation shall not apply tonon-risk assets as defined by the BSP.In case the limit is breached due to themarking-to-market of certain investment/s orany extraordinary circumstances, e.g.,abnormal redemptions which are beyondthe control of the trustee, the trustee shallbe given thirty (30) days from the time thelimit is breached to correct the same.(As amended by Circular No. 577 dated 17 August 2007)§ 4410Q.9 Allowable investments andvaluation. UITF investments shall be limitedto bank deposits and the following financialinstruments:(a) Securities issued by or guaranteedby the Philippine government, or the BSP;(b) Tradable securities issued by thegovernment of a foreign country, anypolitical subdivision of a foreign country orany supranational entity;(c) Exchange-listed securities;(d) Marketable instruments that aretraded in an organized exchange;(e) Loans traded in an organizedmarket;(f) Loans arising from repo agreementswhich are transacted through an exchangerecognized by the SEC, subject to thecondition that the repo contracts may bepre-terminated lawfully by the trust entityadministering the UITF and acting as lender,with due notice to its counterparty and themarket operator; and(g) Such other tradable investmentsoutlets/categories as the BSP may allow.Provided, That the investment of thepeso UITF in tradable foreign currencydenominatedfinancial instruments shallbe subject to Items “e” and “f” of Subsec.4409Q.6.Provided further, That a financialinstrument is regarded as tradable ifquoted two-way prices are readily andregularly available from an exchange,dealer, broker, industry group, pricingservice or regulatory agency, and thoseprices represent actual and regularlyoccurring market transactions on an arm’slength basis.The UITF may avail itself of financialderivatives instruments solely for thepurpose of hedging risk exposures of theexisting investments of the Fund, providedthese are accounted for in accordancewith existing BSP hedging guidelines aswell as the trust entity’s risk managementand hedging policies duly approved by theTrust Committee and disclosed toparticipants.The use of hedging instruments shallalso be disclosed in the “Plan” as providedin Item “c” of Subsec. 4410Q.6 andspecified in the quarterly “list of investmentoutlets” as provided in Item “a” of Subsec.4410Q.7.(As amended by M-2010-033 dated 04 October 2010,Circular Nos. 676 dated 29 December 2009 and 675 dated22 December 2009)§ 4410Q.10 Other related guidelineson valuation of allowable investmentsa. In pricing debt securities,interpolated yields shall be used forsecurities with odd or off-the-run tenorsusing the straight-line basis and generallyaccepted market convention.b. In case outstanding UIT Fundinvestments may deteriorate in quality, i.e.,no longer tradable as defined under Subsec.4410Q.9, the trustee shall immediatelyprovision to reflect fair value in accordancewith generally accepted accountingprinciples or as may be prescribed by theBSP. If no fair value is available, theinstrument shall be assumed to be of nomarket value.Manual of Regulations for Non-Bank Financial InstitutionsQ RegulationsPart IV - Page 27