The Securities and Exchange Commission (“SEC”) issued Memorandum Circular No. 5 (s. 2019) (“Guidelines”), which contains the rules on the implementation of the ASEAN Capital Markets Forum (“ACMF”) Pass. This is because the SEC is a signatory to the Memorandum of Understanding on the ACMF Pass under the ASEAN Capital Market Professional Mobility Framework (“Framework”) together with the regulators of Thailand, Malaysia and Singapore.
Implications for business in the Philippines
The Framework aims to enhance the connectivity of capital market professionals in the ASEAN region. In relation to this, the ACMF Pass allows the free movement of professionals licensed from a home country to perform investment advice activities and issue research reports on ASEAN financial products in a host country under the Framework. The Guidelines are applicable to professionals in the Philippines who intend to obtain an ACMF Pass in another signatory country, and those in other signatory countries who want to obtain that same pass.
Significant provisions of the Regulation
The following registered capital market professionals in the Philippines are qualified to apply for an ACMF Pass from a host regulator and become a recognised representative in other signatory countries:
On the other hand, a professional from other signatory countries is eligible to obtain the ACMF Pass and become a recognised representative in the Philippines, provided that he/she:
The foregoing recognised representatives may give advice only on the following ASEAN capital market products: shares, bonds, and units of collective investments scheme including real estate investment trust and infrastructure fund.
Furthermore, the recognised representatives are permitted to perform the following activities in the host jurisdiction:
Nevertheless, the recognised representative is prohibited to perform the following activities in the host jurisdiction:
The validity of the ACMF Pass is two years from date of grant unless earlier revoked by the SEC, and each recognised representative will be permitted to perform activities under the Framework in a host jurisdiction for the duration of such validity. The process and requirements for application and renewal of the ACMF Pass are detailed out in the Guidelines.
The ACMF Pass may also be revoked by the SEC, after due notice and hearing, based on the following grounds:
The Guidelines allow the free movement of professionals licensed from a home country to perform investment advice activities and issue research reports on ASEAN financial products in a host country. Through this SEC regulation, the Philippines aims to enhance and play a huge role in the connectivity of capital market professionals in the ASEAN region, thereby in the process also promoting investor protection and market integrity.
This alert is for general information only and is not a substitute for legal advice.