Mutual funds okay as PERA infusion

The Securities and Exchange Commission listed securities including mutual funds and real estate investment trust shares, as Personal Equity and Retirement Account investments.

SEC issued Memorandum Circular 7, Series of 2022, providing for the Rules on Qualified and/or Eligible PERA investment products, pursuant to Republic Act 9505, or the PERA Act of 2008, and its implementing rules and regulations.

The new guidelines identify securities registered pursuant to the requirements of Republic Act 8799, or the Securities Regulation Code, and Republic Act 2629, or the Investment Company Act, that are deemed eligible PERA investment products.

These include newly-formed mutual funds, including any sub-fund of an umbrella fund and exchange-traded funds whose fund managers have a track record for the past five years prior to the application of being responsible for the operation and management of a registered mutual fund which has been offered to the general public.

The name of the newly formed mutual fund must contain the words “Personal Equity and Retirement Account” or “PERA.”

BSP-issued instruments allowed

Corporate bonds with an investible rating issued by an accredited credit rating agency, and equity securities that form part of the Philippine Stock Exchange Dividend Yield Index are also deemed eligible PERA investment products.

The guidelines identify government securities, those issued by the Bangko Sentral ng Pilipinas, and corporate bonds issued by banks in compliance with BSP requirements as eligible PERA investment products.

Equity securities included in the PSE index may be classified as eligible PERA investment products, provided that the PSE certify to the SEC that the equity securities met the requisites of being non-speculative, readily marketable, and with a track record of regular income payment to investors. The Commission will disseminate the PSE-certified list of PERA eligible securities comprising the PSEi through its website.

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