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Asset and portfolio management
FinTechs belonging to this category offer asset and portfolio management services via an internet platform or software programs and usually manage and dispose of the assets of their customers long or short term according to their specifications without actually holding the property or the possession of those assets. FinTechs, which provide information about and access to overnight or time deposit accounts at national and foreign banks and which execute the transactions to these accounts, also belong to this category. Some FinTechs however only act on request of the customer.

Aside from that some FinTechs offer software or internet solutions enabling users to manage and plan their personal finances on their own by providing graphics, overviews and compilations of their financial data and sometimes indicating financial risks or opportunities, but without actually managing the assets.


Attitude of the country towards modern asset and portfolio management services

We believe that there are no reservations as there are regulations allowing investment management activities to be carried out by financial institutions, provided that prior authority is obtained from the BSP.

The regulations define “investment management activity” as referring to any activity resulting from a contract or agreement primarily for financial return whereby the institution (the investment manager) binds itself to handle or manage investible funds or any investment portfolio in a representative capacity as financial or managing agent, adviser, consultant or administrator of financial or investment management, advisory, consultancy or any similar arrangement which does not create or result in a trusteeship. “Trust business” refers to any activity resulting from a trustor-trustee relationship (trusteeship) involving the appointment of a trustee by a trustor for the administration, holding, management of funds and/or properties of the trustor by the trustee for the use, benefit, or advantage of the trustor or of others called beneficiaries. “Other fiduciary business”, on the other hand, refers to any activity of a trust-licensed entity resulting from a contract or agreement whereby the bank binds itself to render services or to act in a representative capacity such as in an agency, guardianship, administratorship of wills, properties and estates, executorship, receivership, and other similar services which do not create or result in a trusteeship.

Banks which are regulated by the BSP are allowed to act as managing agent, adviser, consultant, or administrator of investment management/advisory/consultancy account, although such authority that may be obtained from the BSP is not to be construed as including the authority to engage in trust and other fiduciary business. Regarding a bank which holds a trust license or a trust entity (which also holds a trust license), such license allows it to conduct trust and other fiduciary business which includes investment management activities. 

Investment houses which are primarily regulated by the SEC are likewise allowed to act as financial consultant, investment adviser or portfolio manager, although the foregoing is not to be construed as authority for such entities to engage in trust and other fiduciary business. Prior authority from the BSP should be obtained by an investment house before it can engage in investment management activities. 

In addition to investment houses, the regulations allow other non-bank entities licensed or incorporated as a financial institution by the appropriate government agency or by special law or charter to apply for authority to engage in investment management activities.

In respect of investment companies, which are stock corporations primarily engaged or hold themselves out as being engaged primarily, or propose to engage, i
n the business of investing, reinvesting, and trading in securities, they may appoint a fund advisor, which should have an investment company adviser license from the SEC, to advise or recommend investment decisions with regard to the securities or other portfolio of the investment company.

Legal affairs

Obligations and requirements to provide asset and portfolio management, or ancillary services described above

Where a non-bank financial institution (including an investment house) intends to obtain an authority from the BSP that will allow it to engage in investment management activities, it should have been duly licensed or incorporated as a financial institution by the appropriate government agency or credited by special law or charter. Moreover, it is required to have a combined capital accounts of not less than PhP300 million (approx. US$5,754,846) (or such amount as may be required by the Monetary Board of the BSP or other regulatory agency. It should also deposit with the BSP eligible government securities amounting to at least 1% of the book value of the total volume of trust, other fiduciary, and investment management activities, but no less than PhP500,000 (approx. US$9,591), as minimum basic security deposit for the faithful performance of trust and other fiduciary duties. It is also required to create an investment management committee, appoint an investment management officer and other subordinate officers and a clear definition of their duties and responsibilities as well as their line and staff functional relationships within the organisation which shall be in accordance with the guidelines set by the BSP, among other requirements.

Persons or entities intending to provide services in the Philippines would generally be considered doing business in this jurisdiction and therefore, must also register and obtain a primary license from the Philippine Securities and Exchange Commission (SEC). This entails submission of documentary requirements with the SEC depending on the corporate vehicle (subsidiary or branch) intended to be established.

Additional comments regarding the legal situation for asset and portfolio management services or what FinTech’s must be aware of in this business area

Investment management activities are within the authority of the BSP to regulate. Accordingly, it may issue new regulations or amendatory regulations to the extent that the present regulations may not be sufficient to cover asset and portfolio management services of FinTechs.

Economic conditions

Market size for asset and portfolio management services and biggest companies in this business area

Based on the BSP website, there are 36 financial institutions with trust authority as of 8 April 2022 (although four (4) of such financial institutions are considered to have inactive trust license). There does not appear to be a publicly available list of financial institutions with investment management authority from the BSP.

Additional comments regarding the economic situation for asset and portfolio management services or what FinTech’s must be aware of in this business area





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